Chinese billionaire lost $27 billion amid Beijing’s crackdown on tech giants

billionaire loses $27 billion

The Chinese government’s ongoing crackdown on private companies has reportedly resulted in a Chinese billionaire losing over $27 billion this year.

Thanos snapped: Colin Huang, founder of the Chinese e-commerce platform Pinduoduo Inc. (PDD), lost nearly half his wealth as Beijing continues to impose stricter restrictions on tech giants and U.S.-listed Chinese companies, according to Bloomberg.  

  • The new policies reportedly resulted in Pinduoduo’s American depositary receipts (ADR) falling 44% year-to-date. Pinduoduo’s market value fell to about $125 billion after reaching a peak of $178 billion.
  • Huang, who owns 28% of PDD, suffered the biggest loss among the 500 members of the Bloomberg Billionaires Index and is now worth about $35 billion, when in February he was worth $70 billion. Huang’s loss is even bigger than the estimated $16 billion that China Evergrande Group Chairman Hui Ka Yan lost this year. 
  • Huang resigned as the company’s chief executive officer last year and quit his post as chairman in March.

Growth halted: Founded in 2015, the e-commerce giant was doing relatively well last year, even exceeding Alibaba’s  779 million users in its online marketplaces with 788 million users in December.

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  • However, President Xi Jinping’s vision for “common prosperity” eventually forced tech companies to initiate efforts that would close China’s wealth gap, reported Time.
  • The previously untouchable tycoons are now being told to maintain a low profile, impose fair policies on workers, prioritize government initiatives and avoid criticizing the Chinese Communist Party in public.
  • Last year, Huang and PDD’s founding team donated $2.4 billion worth of company shares to a charitable trust. A month ago, PDD also pledged $1.5 billion to help in improving China’s agriculture sector.
  • Alibaba Group Holding Ltd’s ADRs also fell by 33% while Tencent Holdings Ltd’s shares in Hong Kong dove this year by 20%.
  • Tencent’s Pony Ma lost over $10 billion while Alibaba founder Jack Ma lost $6.8 billion.

Featured Image via Xinhua

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