The day tech imploded

Hi all, this is Zheping in Hong Kong. Chinese tech shares plumbed new lows after Xi Jinping prevailed — big-time — during the twice-a-decade [View in browser]( [Bloomberg]( Hi all, this is Zheping in Hong Kong. Chinese tech shares plumbed new lows after Xi Jinping prevailed — big-time — during the twice-a-decade Communist Party Congress. But first… Today’s must-reads: • Internet tycoons including Jack Ma lost billions in Monday’s tech stock [meltdown](. • Amazon workers suffer another [setback](to their nascent labor movement. • Details emerged of how Chinese agents allegedly tried to [obstruct](a probe into Huawei. Day of reckoning In a reshuffle of the Communist Party’s top echelons over the weekend, Xi installed [six loyalists]( to his inner circle and secured a historic third term. It was a display of power unseen for decades, the kind that allowed the Chinese president to rewrite succession rules in his favor in the first place. The 69-year-old managed to break with more norms this time: disregarding retirement [age](, [freezing out](female leaders, and (perhaps) allowing the dramatic [exit]( of his former boss. Then followed the worst selloff of Chinese stocks since the 2008 financial crisis, as investors quailed at the prospect of even fewer checks and balances on the most powerful leader since Mao. It seemed like there was no end in sight to China’s strict Covid-Zero policy, which has crippled consumer spending and supply chains. The prospects for [market-oriented reformers]( in governing bodies dimmed. And it extinguished what little hope was left of quick relief for the once-giant internet sector. A brutal two years for Chinese tech firms may now get even worse. On Monday, US-listed Chinese shares plunged to their lowest in almost a decade, shedding some [$90 billion]( in market capitalization. The onslaught also gripped Hong Kong markets, though tech shares pared some of the losses Tuesday. Once China’s most valuable company and the torchbearer of its tech industry, Alibaba Group Holding Ltd. is now down roughly 80% from its peak in October 2020. That was around the time Xi’s government kicked off a sweeping crackdown that ended up engulfing every internet sphere from online entertainment to fintech and the gig economy. Companies like Alibaba and Tencent Holdings Ltd., once kingmakers of China’s private economy, now manage next-to-zero growth. Like aging conglomerates, their focus is on aggressive cost controls, responding to Xi’s drive to combat tech monopolies and pursue so-called [“common prosperity.”]( In many ways, the broader pessimism is more about China -- the remaining bulls argue it’s actually a good time to buy the dip in that sector, which will eventually recover along with the world’s No. 2 economy. But there’re mixed signals in the numbers. This week, China also dropped September-quarter economic data – delayed for almost a week during the Party congress. The 3.9% GDP growth was [better-than-feared](, though retail sales weakened and unemployment increased. The leadership congress didn’t offer many clues on Xi’s tech policies for the next five years, and few expect major shifts in the lead-up to a government handover that’s slated for March. But during a two-hour speech to kick off the weeklong gathering, Xi [reiterated]( that developing core technologies – things like chips and artificial intelligence – would better serve the state’s strategic needs. That’s top of mind as the Biden administration moves to rein in China’s tech ambitions. As for the Chinese people, the most tangible outcome of the congress may be even more extreme policing of the internet. Words like “finished,” “enthroned,“ and “step down” are now censored in Chinese social media posts, many users [reported](, regardless of context. One anonymous user reported, in a screenshot that’s since gone viral, how their one-word post “sigh” triggered a brusque warning about illegal content. It’s impossible to verify its authenticity, but that episode in many ways encapsulates the sense of resignation that now permeates the online arena. —[Zheping Huang](mailto:zhuang245@bloomberg.net) The big story Apple Inc. increased prices for its music and TV+ services for the first time,[ potentially handing rivals an edge]( in the fiercely competitive streaming industry. Get fully charged Jellysmack, the SoftBank-backed startup that helps content creators become YouTube and TikTok stars, has [embarked on a spending spree]( to find Asia’s MrBeast. Apple has finally clarified its policy toward [cryptocurrency trading and non-fungible tokens](. Kids who play three hours or more of video games a day perform better on memory tests, [according to a new study](. 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