Chinese E-Commerce Stocks Struggle Amid Lackluster Fiscal Stimulus

Weak Economic Growth Hits Alibaba and Peers

Alibaba Group Holding BABA and other U.S.-listed Chinese e-commerce companies faced a bumpy day on Tuesday. The new fiscal stimulus measures announced by China have not swayed investors, leaving many disappointed.

China’s economy continues to grapple with slow growth, further complicated by ongoing crackdowns on major technology firms. Even as these companies begin to recover from regulatory constraints, new semiconductor sanctions imposed by the U.S. limit China’s access to advanced artificial intelligence technologies. This move reinforces America’s intent to build a stronger semiconductor base independent of China.

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On the same day, shares of Chinese e-commerce giants, including JD.com, Inc. JD and PDD Holdings Inc. PDD, continued their downward trend.

According to reports, China is contemplating a substantial fiscal stimulus package valued at 6 trillion yuan (approximately $850 billion). This package would involve issuing ultra-long special treasury bonds over a three-year period, aimed at revitalizing the economy.

Additionally, earlier announcements from China’s central bank indicate plans to lower banks’ reserve requirement ratios (RRR) by 50 basis points and reduce the seven-day reverse repurchase rate to 1.5% from 1.7%. Both measures aim to stimulate domestic consumption.

Parsed through earlier developments, a stimulus package proposed on September 24 restored over $3 trillion in market value to Chinese stocks trading globally. Notably, shares of Alibaba, JD.com, and PDD surged between 29% and 68% in the last month.

As anticipation builds around Singles’ Day, Alibaba, JD.com, and PDD are launching their promotions. The annual shopping event occurs on November 11, but this year it has begun earlier than usual, according to the South China Morning Post.

Alibaba kicked off its presale on October 16, featuring discounts of at least 50% and free shipping throughout the nation. JD.com and PDD matched this timing, starting their own Singles’ Day promotions on the same day.

To support its efforts, Alibaba has allocated over $5.7 billion for resources during this shopping festival. Meanwhile, JD.com is cutting prices on more than a billion items, offering substantial discounts on high-value products.

Latest Stock Movements: As of Tuesday, BABA shares fell 4.17% to $103.31. JD stock dipped by 7.68%, and PDD saw a decline of 5.44%.

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