PDD - Why Are Chinese Stocks Down And Will They Recover In 2022? A Quick Take For Alibaba Investors4

• While ongoing regulatory crackdowns have certainly taken a toll on both the fundamental and valuation growth prospects for Chinese equities, a broader domestic economic slowdown is fueling additional risks.
• The Chinese property market, a core driver of China's economic growth, has been in a slump since August 2021 following a crackdown on indebted property developers.
• The recent lockdowns across major cities due to China's COVID Zero policy has also exacerbated the fragile economic situation at hand.
• Despite the government's pledge to restore economic stability, there seems to be little that could be done, especially if China continues to prioritize the eradication of COVID which could risk pushing its economy into a structural downturn.
• The current situation creates a perfect storm for further volatility in Chinese equities, especially influential players like Alibaba which Beijing seeks to tame.

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