Alibaba and Other Chinese Stocks Keep Rallying. A Big Risk Is Being Ignored.

Alibaba

and other Chinese tech stocks appear to have reversed a brutal two-year slide this month. Investors betting on a rebound may be ignoring the risk of China’s “zero Covid” policies and just how much more these stocks could be hurt.

Alibaba

(ticker: BABA) lost almost half its value in 2021 as, along with the rest of the Chinese tech sector, it found itself on the wrong side of regulators in both Beijing and Washington. The picture cleared up little in 2022, with China’s restrictive policies to control Covid-19 ushering the company to its worst revenue growth on record.