A dark cloud over Chinese stocks
Shares in Chinese companies have experienced the biggest two-day fall since 2008 amid growing regulatory pressure.
Shares in Chinese companies have plunged amid growing regulatory pressure. The Nasdaq Golden Dragon China index, which tracks Chinese firms listed in America, fell by 15% on Monday and Tuesday, the biggest two-day plunge since 2008. China’s benchmark CSI 300 index fell by 6.5% over the same period. Tech firms slumped, with Tencent’s shares in Hong Kong down by nearly 16% over Monday and Tuesday. The latest falls followed news of a ban on for-profit school tutoring, a big industry in Asia.
The sell-off underscores just “how fragile investors’ confidence has become after a months-long regulatory onslaught”, say Jeanny Yu and Livia Yap on Bloomberg. Beijing is intent on reining in “private enterprises it blames for exacerbating inequality” and “increasing financial risk”. The realisation that regulators are willing to impose “short-term pain” on markets while pursuing “longer-term socialist goals has been a rude awakening for investors”.
As of 5 May, there were 248 Chinese companies with listings in the US. Companies such as Alibaba and Pinduoduo have listings in America in order to access Western capital markets. There is now a “dark cloud hanging over” these stocks, writes Therese Poletti for MarketWatch. The next one in the firing line? The Chinese authorities have made their displeasure clear with ride-hailing app Didi, which recently listed in New York.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
How does the Lifetime ISA work? Key LISA rules
What is a Lifetime ISA (LISA) and how much could the government bonus boost your savings by? We look at the perks and the pitfalls.
-
AJ Bell: a fine British fintech going cheap
Opinion Don’t overlook investment platform AJ Bell, a significantly undervalued British business with an excellent financial base
-
AJ Bell: a fine British fintech going cheap
Opinion Don’t overlook investment platform AJ Bell, a significantly undervalued British business with an excellent financial base
-
Investors remain calm as the Middle East war unfolds
Conflict in the Middle East has failed to shake oil or stock markets. Can the peace hold?
-
The British railway industry is in rude health – here's why investors should jump aboard
The railway industry has bounced back from the devastating impact of the pandemic and is entering a new phase of development – and profitability
-
US and China reach a ceasefire in their trade war after talks in London
The US and China's trading relationship – the most important one in the global economy – is back on track. Will the truce last?
-
Infrastructure investing: a haven of stable growth amid market turmoil
From booming construction in emerging markets to digital and green transitions, the infrastructure sector offers security, returns and long-term opportunities
-
The costly myth of “sell in May”
Opinion May 2025's strong returns for US stocks have once again shown that putting too much weight on seasonal patterns will only make investors poorer, says Max King
-
Who’s driving Tesla?
As Elon Musk steps back from government with his eyes on the stars, investors ask if he’s still behind the wheel at his electric-car maker.
-
Investment opportunities in the world of Coca-Cola
There is far more to Coca-Cola than just one giant firm. The companies that bottle and distribute the ubiquitous soft drink are promising investments in their own right.