New Chinese regulatory push sends Meituan, tech stocks tumbling

Online food delivery group Meituan (3690.HK) led a rout of Chinese technology company shares on Friday, as authorities announced a series of regulatory moves to boost growth while keeping financial risks under control.

China's state planner, the National Development and Reform Commission (NDRC), on Friday issued rules to promote a faster recovery from the pandemic in the services sector, including guidance for online food delivery platforms to reduce service fees to help to lower operating costs for catering businesses. Those rules were announced as the China Banking and Insurance Regulatory Commission warned against using the metaverse as a tool for illegal fund-raising, saying that some companies were engaging in illegal fund-raising, fraud, and virtual real estate speculation.

Investors, entrepreneurs, and established Chinese tech giants have in recent months piled into the trend of the metaverse, described as a virtual shared space that blurs the boundaries between the online and offline worlds. The regulatory moves come as China's technology sector is still smarting from a year-long regulatory crackdown, which has upended once-common industry practices and wiped millions of dollars off share prices.