A hefty 62 percent of private equity-owned Chinese internet and software companies that went public in 2017 and 2018 lost more than 30 percent of their market value in the first 12 months after listing. That compares to an average increase of 105 percent for companies that listed in 2015 and 2016.
The honeymoon was bound to end, because the mountain of Chinese cash seeking returns has been shrinking. Yuan-denominated fundraising fell for the first time in eight years in 2018. Money from peer-to-peer lenders dried up amid Beijing’s crackdown on the sector, while China’s decision to put brakes on domestic IPOs to support the stock market blocked the exit door for potential investors.
https://www.bloombergquint.com/opinion/the-china-tech-bubble-is-dead-long-live-the-china-tech-bubble#gs.2qcto8
The China Tech Bubble Is Dead. Long Live the China Tech Bubble
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It may not end up lasting 100 years but of all the Chinese companies, I’d wager that Alibaba has the best shot.
I’ve lived in China (Shenzhen and Suzhou) and my wife was born and raised in China.
It comes down how Chinese citizens invest. The stock markets are quite unreliable so most Chinese citizens invest in real estate. Sometimes multiple family members combine funds to buy an apartment just to leave it unoccupied because it’s an investment that’s appreciating in value.
Everything well and good so far. Except, like all investments, things go up and down. But the Chinese govt intervenes every time housing prices show any signs of correction. And we all known how interventions and artificial price propping ends up.
Also, in cities like Hong Kong the prices are completely manipulated by the nexus between builders and the local govt officials. It’s the only part of HK that’s heavily corrupt.
I could go on and on but you get the idea.