China tech shares plunge after report that Beijing seeks to break up Alipay
Chinese technology shares tumbled once again Monday on the latest government moves to reshape private enterprise.
Traders mulled a report that the government intends to break up Ant Group Co.’s Alipay business and a statement Friday calling for better protection of gig economy workers’ rights. The Hang Seng Tech Index fell as much as 2.7%, with Meituan and Alibaba Group Holding among the biggest drags on the gauge.
Major platform operators must review working conditions of gig economy workers to ensure their rights in income and labor safety, according to a government statement issued late Friday. That came after a meeting between four government agencies and 10 major platform companies, including Meituan, Alibaba and Tencent Holdings Ltd.
Separately, China is seeking to break up Alipay and create a separate app for its loan business, the Financial Times reported, citing people familiar with the plan. Regulators have already ordered the company to separate the back end of the lending unit from the rest of its financial offerings and bring in outside shareholders, it said.
The latest curbs add fuel to the months-long pressure on Chinese tech stocks after the government’s shock ban of profits at tutoring companies triggered a near $1 trillion global selloff. Investors are concerned the sector remains vulnerable to further declines even after the recent slide.
The Hang Seng Tech gauge is down 22% so far this year, though has rebounded about 11% from an August low.
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