The Value Of Big Chinese Corporations' Shares Has Plummeted By Rs 7 Lakh Crore.

The ruling Communist Party, led by Chinese President Xi Jinping, has taken the path of socialism. Jinping has embraced Mao Zedong's slogan of prosperity for all. Last month, he told the party's economic affairs committee that prosperity was a necessity of socialism and an essential element of China's modernization.

Earlier, the government had started cracking down on big companies. The crackdown on technology, real estate, private tuition, and video game companies has impacted the market value of giants. 

Shares of major Chinese companies have eroded by more than Rs 7 lakh crore since February.

According to the state-run People's Daily, the goal is to expand the middle class, increase the income of low-income people, regulate higher payments and build an equal Chinese society by banning illegal income. In addition, the communist government wants to put pressure on big companies.

David Mozer, an associate professor at Beijing Capital Normal Uni, says these billionaires and technology companies could threaten the Communist Party. 

To ease the concerns of large companies, the People's Daily wrote on Wednesday that the regulatory action was not intended to harm business. The status of the private sector in the country will remain the same. Still, there is no denying that this will be the most significant socio-economic change since the reformist leader Deng Xiaoping's market-oriented reforms in the 1970s.

It seems that the Chinese billionaires have understood the meaning of the government's mantra of prosperity. On Thursday, Jack Mani e-commerce company Alibaba raised Rs 1.13 lakh crore by 2025 for public welfare programs. They have promised to give. Tencent, Pinduduo, Xiaomi, and Mituan have previously funded various social projects.

All eyes are on Alibaba after regulators slapped a fine of Rs 20,000 crore and canceled the Rs 2.72 lakh crore IPO of the company's finance company Anton. Many Chinese billionaires have moved out of the boardroom over the past few weeks, judging by the political sail. Beatdance's Zhang Yiming, JD.com's Richard Liu, and Pinduodu's Colin Huang are behind the scenes.

1% of people have 31% wealth

A Communist Party official said that prosperity for all did not mean eradicating the rich to help the poor. Still, it was rumored that the government could impose wealth, inheritance, and capital gains tax for equality in society. According to Credit Suisse, the top 1% of people in the country own 31% of the wealth, up from 21% 20 years ago. In addition, the tax on internet companies is likely to be increased from 10% to 25% like other companies.