Hong Kong stocks tank to 14-year low as re-elected Xi's reshuffle sparks worries about China's economic recovery

• Stocks in Hong Kong fell nearly 7% to 14-year lows as investors worried about China's economic recovery.
• Analysts say newly re-elected President Xi Jinping's consolidation of power risks a policy mistake.

Stocks in Hong Kong plunged to touch a 14-year low Monday as President Xi Jinping's consolidation of his power sparked fears about the prospects for recovery in China's economy.

Hong Kong's benchmark Hang Seng Index was down 6.82%, trading near levels last seen in 2008. Shares of Chinese tech giant Alibaba sank 12% in Hong Kong, while Tencent slid 11%, pulling the Hang Seng Tech Index more than 10% lower.

The selloff came after Xi secured an unprecedented third term as Communist Party chief on Sunday and filled his core leadership team with loyalists. That could signal a tighter grip on directing the world's second-largest economy, analysts said.

"The new leadership indicates more concentration in top decision-making procedure," wrote Bank of America analysts in a Monday report, per Nikkei. "Some investors may worry about the lack of checks and balances, and the risk potential policy mistakes evolve into major shocks to the economy."

Official data released Monday showed China's gross domestic product rose 3.9% in the the third quarter of 2022 from a year ago. That beat the 3.4% pace expected from a Reuters poll, but wasn't enough to give a boost to investors concerned about the impact of zero-COVID curbs on the economy.

Other data for September showed exports grew 5.7% year-on-year, the slowest pace since April 2014, while unemployment rose to 5.5% and retail sales grew 2.5%, both a slowdown from August.

"This set of data sends an important message that even [as] COVID measures have become more flexible, as it depends on the number of Covid cases, lockdowns are still a big uncertainty to the economy with the background of the real estate crisis," Iris Pang, ING's chief economist for Greater China wrote.

Hong Kong stocks have come under pressure this year as relations between China and the US have cooled. The Biden administration has introduced measures that threaten to crimp China's tech industry.

Xi called for regulation of "the mechanism of wealth accumulation" in a report to Congress, a sign of intensified oversight of private capital, according to Xinhua state news agency.

Here's how other assets performed Monday:

• The mainland Shanghai Composite Indexof stocks closed 2% lower.
• The CSI 300 index of Shanghai- and Shenzen-listed stocks was down almost 3%.
• The Chinese yuan fell 0.3% to 7.2531 per US dollar, nearing a January 2008 low of 7.2552.
• The Hang Seng China Enterprises Index of major mainland companies lost 7.9%.