Chinese Tech Stocks Tumble — Is a New Wave of Risk-Aversion Emerging?

TradingKey - On July 9, 2025 (U.S. Eastern Time), the Nasdaq Golden Dragon China Index closed down 1.11%, with most major Chinese tech stocks retreating. Alibaba, Bilibili, and JD led the decline, falling 3.85%, 3.54%, and 3.36%, respectively — reflecting ongoing concerns from foreign investors over regulatory risks in the platform economy and uncertainties in profit models.

This pullback signals a broader reassessment of valuation logic for Chinese internet companies among international investors. Leading platform firms remain the main targets of selling pressure, especially amid lingering uncertainty over policy direction, prompting foreign capital to temporarily seek safer ground.

[NASDAQ Golden Dragon China Index, source: TradingView]

Analyst Views from Wall Street

Gokul Hariharan, Asia Tech Analyst at JPMorgan Chase, emphasized that regulatory uncertainty continues to command a risk premium, which will be difficult to fully reverse in the near term.

Tina Lee, Head of Citi Research for Markets, said the current correction reflects a structural market adjustment rather than a sign of a fundamental trend reversal. However, she added that the medium- to long-term outlook will ultimately depend on improvements in corporate fundamentals and progress in U.S.-China regulatory communication.

For investors, near-term volatility may persist. However, as some high-quality names begin to enter valuations zones attractive for entry, the market could present potential opportunities for tactical positioning. Investors are advised to closely monitor policy developments and second-quarter earnings reports as key indicators of whether Chinese equities can stabilize and regain momentum.