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$ 80 billion evaporated from the fortune of Chinese tech tycoons in 2021

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According to the Bloomberg Billionaires Index, China’s 10 richest tech moguls lost $ 80 billion of their total net worth in 2021, due to widespread crackdowns by Chinese regulators.

The decline represents nearly a quarter of their total wealth and is the largest one-year drop since 2012, when the index was launched.

On top of the losers was Bindudu founder Colin Huang, as his fortune fell by $ 42.9 billion, or two-thirds, after the e-commerce platform’s shares fell by nearly a quarter. 70%.

Alibaba co-founder Jack Ma, who has kept a low profile since authorities cracked down on his vast business empire, has been among the biggest losers as his fortune dropped by nearly $ 13 billion.

The fortune of Chinese billionaire Didi Global, founder of Wei Cheng, has seen a year of strong fluctuations: in the weeks leading up to the listing of Didi in the United States in June, investors took shares in the secondary market, pushing the valuation of the giant of the ride. sharing to $ 95 billion and bringing founder Cheng’s stake value to $ 6.7 billion.

But shares in the Beijing-based company have rapidly fallen by more than 60% since Chinese officials announced an investigation and demanded that it be canceled from the New York Stock Exchange, plunging Cheng’s fortune to $ 1.7 billion. dollars.

Increased antitrust scrutiny by Chinese regulators has also become increasingly common since Antgroup’s initial public offering ended abruptly in late 2020.

Tech companies, including Alibaba, Tencent, Meituan and Bindudo, have seen their high valuations plummet after being fined for reasons ranging from monopolistic practices, disruption of market rules and underreporting of deals.

China is also paying more attention to the so-called VIE facility, a loophole that the country’s tech industry has long used to circumvent some government restrictions and raise capital from foreign investors. Uncertainty reigns even after China unveiled sweeping regulations governing overseas stock sales by state-owned companies, threatening greater scrutiny over initial overseas public offerings that have continued almost uncontrolled for two decades.

Meanwhile, the Securities and Exchange Commission this month announced its final plan for a new law requiring Chinese companies to open their books to US control or risk delisting from the New York Stock Exchange and Nasdaq within 3 years.

For his part, the director of the Asia Global Institute at the University of Hong Kong, Chen Chiu, said: “The best days of the technology sector in China are now behind us. “” Without access to US capital markets, the history of the technology sector in China would have been completely different, “he added.

Unlike his peers, ByteDance billionaire founder Zhang Yaming’s fortune increased last year, earning $ 19.5 billion. in based on an assessment provided by SoftBank Group quest’year. That is in partly due to the fact that TikTok’s parent company is closely linked, isolated from the vagaries of market turmoil.

Yaming has tried to keep a low profile during strict regulatory measures. In May, he announced his resignation as chief executive, then stepped down from the board last month.

This comes when several tech executives followed suit, when the co-founder of the live streaming Kaishu, Su Hawa, stepped down as CEO in November, just nine months after the company’s initial public offering in Hong Kong.

In September, JD.com appointed a new president, saying President Richard Liu will focus on long-term strategies.

charitable donations

Even with the loss of personal wealth, some Chinese billionaires have increased their philanthropy in response to President Xi Jinping’s warnings of “common prosperity” to address social inequality, as Xiaomi and Mituan billionaires Li Jun and Wang Zheng donated $ 2.2 billion and $ 2 3 billion, respectively, to charities, which in some contributed to the catastrophe of their fortunes.

By the end of August, Chinese billionaires had donated at least $ 5 billion in charity in 2021, a 20% increase over the previous year’s total national donations, according to data compiled by Bloomberg News and viewed by Al Arabiya.net.

With tech billionaires like Jack Ma moving away from the public spotlight, the industry must reshape its core strategy for new growth. in future, said Chen of the University of Hong Kong.

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