According to the Bloomberg Billionaires Index, the wealthiest individuals in China lost billions of dollars in a single day as a result of a severe market sell-off that on Monday sent Hong Kong shares to a 14-year low.
$12.7 billion of the fortune of the 13 richest Chinese businessmen on Bloomberg's billionaire list was destroyed after President Xi Jinping's consolidation of power aroused concerns about the possibilities for China's economy's revival due to Xi's top-down approach to economic management.
According to Bloomberg, Pony Ma, the founder and CEO of Tencent, was the greatest victim of the market crash as his net worth fell by $2.5 billion to $24 billion. Ma's losses were mostly caused by declines in the share price of Tencent, which is listed in Hong Kong and finished Monday at 207 Hong Kong dollars, or $26.4, down 11%.
Ma's fellow tech billionaires were severely impacted by Monday's stock market decline as well. According to Bloomberg, JD.com's Richard Liu saw his net worth drop by $1.3 billion to $9 billion while Alibaba founder Jack Ma lost $1.2 billion, bringing his total wealth down to $29 billion. Alibaba stock dropped 11% in Hong Kong and 13% on the Nasdaq. JD.com, which is listed on the Nasdaq and in Hong Kong, had a 13% decline in both markets.
Zhong Shanshan, the chairman of Hong Kong-listed Nongfu Spring and a significant shareholder of Shanghai-listed pharma, Wantai, is China's richest man. On Monday, shares in both of these publicly traded companies fell, which caused Zhong Shanshan's net worth to decrease by $2.1 billion to $60 billion.
Due to sporadic COVID-19 lockdowns and regulatory tightening in the wake of Beijing's push for "common prosperity," which holds that the wealthy should distribute their wealth to the poor in order to create a more equal society, the share prices of Chinese companies have been under pressure since 2021.
After Xi won an unprecedented third term as head of the Communist Party on Sunday and filled his core leadership team with supporters, they are now facing increased pressure. Analysts speculated that this would indicate a tighter hold on managing the second-largest economy in the world.
Investors are concerned that President Xi would now have more influence over policy direction given that his supporters make up the new top leadership team, according to a market strategist at the online trading platform IG, Yeap Jun Rong. "This signals that we may be expecting more of the same in terms of economic policy, which would imply that China's zero-Covid posture would be further cemented and that more efforts would be taken in the direction of the "shared prosperity" objective."
At noon on Tuesday, the benchmark Hang Seng Index for Hong Kong was 0.9% higher at 15,313.22. At 2,999.55, the Shanghai Composite Index was up 0.8%.