Chinese Porn Crackdown Drives Stocks Down
NEW YORK — China’s “Cleaning of the Web,” a nationwide crackdown on Internet porn that has been linked to the deletion of more than 100 websites, appears to be driving down the country’s stocks trading in New York.
The Bloomberg index of the most-traded Chinese stocks in the U.S. slipped 0.5 percent to 100.01, Bloomberg reported today. Leading in the decline is Sina Corp, a Chinese online media company for Chinese communities around the world. Weibo Corp, a Twitter-esque social media site under the Sina Corp umbrella, debuted in U.S. trading last week and dropped most in the week.
The largest Chinese exchange-traded fund in the states, iShare China Large-Cap ETF, also took a hit, falling .8 percent to $35.55.
The antiporn initiative has also seen the removal of 3,300 accounts on China-based social networking services, including Tencent Holdings Ltd.’s WeChat and Sina Weibo, Xinhua News Agency reported yesterday. Sina and Baidu Inc., owner of China’s most popular search engine, publicly announced their support for the campaign.
While there has been good consensus that the “Cleaning” is behind Chinese stock’s recent depreciation, not everyone believes the dip is cause for concern.
“This kind of government-related crackdown should negatively impact stocks, but usually it should be just a temporary impact,” Echo He, a senior equity analyst at New York-based Maxim Group, told Bloomberg. “It doesn’t fundamentally affect how well the company could grow and how much revenue the company could earn.”