As $1 trillion evaporated from Chinese stocks last week, some investors realized they hadn’t paid enough attention to the country’s most important man: President Xi Jinping.
Traders began scouring databases and other collections of Xi’s speeches to find clues about which industries might be next after his administration abruptly smashed the country’s $100 billion for-profit education sector, according to several employees at Chinese financial firms who asked not to be identified. Screenshots of key passages made the rounds: Xi denouncing "obscene” online content, education inequality and housing-price speculation in school districts.
The jitters continued this week, with Tencent Holdings Ltd. shares plunging after the Economic Information Daily — an offshoot of the official Xinhua News Agency — decried the "spiritual opium” of online gaming, sparking worries that the sector might be next on the chopping block. The selloff extended to Japanese gaming developers that have licensing deals with Tencent, China’s most valuable corporation.