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Xi Jinping has begun his historic third term as Chinese leader by crashing the stock market, with tens of billions wiped off the value of leading firms in recent days. 

Exchanges in Hong Kong, Shangahi and Shenzhen all fell this week after Xi was handed another five years in power and used it to tighten his grip on the country.

Some $70billion was also wiped off the value of Chinese firms listed overseas as foreigner investors fled in the face of Xi’s increasingly authoritarian plans for the Chinese economy.

It comes after he stripped top economists and experts from positions of power and instead filled the posts with loyalists, with analysts saying it appears he is willing to stunt China‘s growth provided it hands him more power.

Xi Jinping began his third term in power by overseeing a sell-off on Chinese stock markets as foreign investors balked at his increasingly authoritarian rule

Xi Jinping began his third term in power by overseeing a sell-off on Chinese stock markets as foreign investors balked at his increasingly authoritarian rule

Charles Parton, a former British diplomat now with the Council on Geostrategy, told MailOnline: ‘Xi placed much more emphasis on the party than the economy.

‘What Xi believes in is economic model where he relies on state sector, and the private sector is controlled by the party.

‘He thinks that is essential, and that if he reforms then he loses control.

‘With economy goes money, and with money goes power, and only the Communist Party gets to have power.’

Hong Kong’s Hang Seng Index, which is dominated by mainland Chinese firms, fell more than 6 per cent Monday after Xi gained his third term.

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It means the index is now down more than a third since the start of the year and is the world’s worst-performing.

Shares also fell in Shanghai and Shenzhen, mainland Chinese financial hubs, as markets balked at Xi’s push for control.

Hong Kong's Hang Seng index fell particularly sharply on Monday as Xi began his third term, and is now the world's worst-performing index in 2022

Hong Kong’s Hang Seng index fell particularly sharply on Monday as Xi began his third term, and is now the world’s worst-performing index in 2022

Shanghai's market also fell as Xi stripped his top team of economists and experts and replaced them with hardliners and ideologues

Shanghai’s market also fell as Xi stripped his top team of economists and experts and replaced them with hardliners and ideologues

Shenzhen's stock market also fell sharply after Xi's term began before rallying, though remains below where it was before he was given five more years in power

Shenzhen’s stock market also fell sharply after Xi’s term began before rallying, though remains below where it was before he was given five more years in power

The Leninist leader outlined his vision for the next five years at the weekend, vowing to protect China from what he sees as an increasingly hostile world while indoctrinating every sector of society – including business – into ‘Xi Jinping thought’.

He also announced a new Politburo Standing Committee – six men who will help him run the country – which he stacked with ideologues who are seen as short on expertise and experience.

Li Qiang was brought in as a new premier, the former leader of Shanghai who oversaw a zero Covid lockdown on the city that wrecked its markets and brought misery to millions of citizens.

He replaces Li Keqiang, a more-moderate politician who had called for ‘all possible means’ to help China’s pandemic-hit economy recover.

Yi Gang, the governor of China’s central bank, was also dropped from the Central Committee – sparking rumours he may resign or be forced from his post.

Daniel Rosen, an expert in economic policy with the CSIS think-tank, said China is facing several large and growing economic crises and Party Congress had failed to address them.

While he admitted that is not congress’s job ‘in normal times’, he argued: ‘These are not normal times.’

He added: ‘The short-term picture is that nobody is feeling better about the outlook for growth in China.

‘The medium-term and long-term outlook – I think what we see is a set of structural, systemic economic problems. 

‘The good thing about Xi’s first two terms is that he showed he understood these problems and had plans to address them. 

‘But no indication he understands the new problems well enough to push past them

‘His new team doesn’t seem like it has disposition to carry out fiscal reforms, clean up the banking sector, reform the equity markets. These problems were just not spoken to adequately [at Party Congress].’

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