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Chinese tech giants took a plunge earlier this month, after the country’s State Administration for Market Regulation released guidelines for new rules to limit abuses of monopolistic power.
Many Chinese tech giants have come to dominate their respective fields, and use that considerable dominance to enter new business lines and head off competition. China’s regulatory body has decided to do something about it, which spells uncertainty for many of these popular stocks. The catalyst may have come from the last-minute cancellation of Ant Financial’s initial public offering, which came on the heels of contentiousness between China’s regulatory body and Ant and Alibaba (NYSE:BABA) founder Jack Ma.
One of those companies getting caught up in the selling was online games, social media, payments and cloud conglomerate Tencent (OTC:TCEHY). However, on its recent third quarter conference call, management sought to reassure investors on the subject of these new regulations.
Tencent claims it can adapt to new anti-monopoly rules in China. Image source: Getty Images.
The regulations appear to be skewed to other businesses
According to management, one silver lining is that the new rules appear mostly to focus on e-commerce businesses such as online marketplaces and food delivery platforms. That …
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