China tech giants invest like there’s no stock slump

Amazon’s stock rose 6.5% during 2021, while its closest Chinese equivalent, Alibaba, lost nearly half its market capitalization. So why is Alibaba investing more in its business than Amazon?

The American retailing and computing behemoth is worth more than five times its Chinese competitor, but by 2022 Alibaba will invest about 60% more than Amazon, according to the consensus of securities analysts polled by Bloomberg.

In fact, Alibaba’s CapEx is expected to double between 2018 and 2022, and Tencent, China’s other computing giant, is expected to nearly triple its capital spending. The analyst forecast for CapEx among the MSCI China Tech Top 100 companies shows a jump from $10 billion to $70 billion between 2020 and 2022.

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