Chinese Stocks: Why BIDU, PDD and BILI Stock Plunged Lower Today

Chinese stocks declined on Monday following news last week that Beijing would be cracking down on debt, asset bubbles and big tech companies. Baidu (NASDAQ:BIDU) and Pinduoduo (NASDAQ:PDD) dropped more than 11% and 12%, respectively; videogame publisher Bilibili (NASDAQ:BILI) crashed 17% on the day.

delisted stocks concept image of delist Chinese stocks from US stock marketSource: Akarat Phasura /

The decline in BIDU stock comes after a strong showing for Baidu in February. By comparison, PDD stock has been declining the past month, though it’s still made serious gains year over year. BILI stock dipped as investors took profits after the company reported 2020 Q4 earnings last week, and today’s decline was in line with that trend.

The wider crunch on Chinese stocks comes after the Chinese government announced projected GDP growth for 2021 that came in slightly underneath economists’ predictions. That moderated projection could be due to the government’s goal of reducing debt-related risks.

More specifically, the Chinese government on Thursday outlined plans to collect data from large technology companies such as Alibaba (NASDAQ:BABA) and Tencent (OTCMKTS:TCEHY), sending their associated stocks spiraling lower. Combined with an announcement that Chinese banking regulators would be cracking down on a bubble in real estate prices, investors are understandably concerned about volatility in share prices.

Chinese regulators additionally mentioned foreign capital inflows as a point of concern with regards to speculative bubbles. The moves by the Chinese government follow hawkish trade policy moves by the U.S. government at the end of February.

On the date of publication, Vivian Medithi did not have (either directly or indirectly) any positions in the securities mentioned in this article.

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