According to Reuters, Hong Kong stocks fell sharply, especially technology stocks, led by Alibaba, following a report that Chinese authorities had taken action against a man named Ma.
Reuters reported that Alibaba stock dropped 9.4%. Meanwhile, according to Chinese language media outlet Xin Tang Ren, tens of billions of dollars have evaporated.
China Central Television (CCTV) reported that the Chinese State Security Bureau arrested an individual surnamed “Ma” from Hangzhou on suspicion of using the Internet to participate in activities that endanger national security.
This article was suddenly republished by a large number of major media outlets throughout China.
People suspected that the person called “Ma” involved in the incident was Jack Ma, founder of Alibaba Group, also born in Hangzhou.
Later, the official media clarified that the arrested man’s name in Hangzhou consists of 3 letters, not 2 letters. So, although both are from the same place and have a similar name, they are two different persons.
However, the confusion instantly impacted the market, showing the economy is not solid as some may think.
According to the Washington Post, Zhou Jiangong, former CEO of the Chinese financial media outlet Yicai and former Editor-in-Chief of Forbes China, claims entrepreneurs are fearful. He said, “The market has become a frightened bird.”
Since 2020, the tech sector has been on the Chinese government’s target through regulatory crackdowns. For this reason, netizens wonder if it was just an incident, in particular, as the confusion spread so widely and fast on the Internet.
According to Chinese language media Xin Tang Ren, Qin Peng, a Current Affairs Commentator, thinks that behind this incident is the Chinese government’s warning to the big tech.
He further added that the authorities want to increase control of the big tech companies, which has had a devastating effect on the investment environment in China.
After this incident, tens of billions of dollars evaporated in an instant. Qin Peng said that’s why investors are so panicked, and they still have to sell their stocks, even if they lose some money.
He added that this shows that the Chinese government can crack down on whoever it wants to without any proper reason.
He said that professional media know what they are doing, as even brief coverage of the case needs to have basic elements that give a quick overview of the situation.
The commentator added that there is no longer an “editorial error” when all websites publish this information.