Concerns that President Xi Jinping would maintain his ideology-driven approach at the expense of economic progress have caused a decline in the value of Chinese enterprises listed in the United States.

In New York, shares of Chinese Internet titans Alibaba and Baidu plummeted by almost 12 percent.

Investors are concerned that the second-largest economy in the world may be hampered by its stringent coronavirus limitations.

One analyst stated that Beijing was in a “tug-of-war” between growth-enhancing policies and zero-Covid policies.

On Monday, Alibaba shares closed 12.5% lower on the New York Stock Exchange, having set a 52-week low earlier in the session.

Internet business Baidu experienced a loss of 12.6%, while e-commerce portal Pinduoduo fell by over 25%.

It comes as the ruling Communist Party of China concluded its biennial conference on Sunday.

President Xi, who achieved a historic third term in office during the week-long event, did not provide a timeline for the loosening of the country’s tough restrictions to halt the spread of the coronavirus.

The zero Covid restrictions have resulted in the lockdown of several of China’s largest cities, including the financial, manufacturing, and shipping powerhouse of Shanghai.

BNP Paribas Asset Management’s Minyue Liu told that China’s economy faces “policy stimulus and several growth headwinds, including Covid limits, a property market slowdown, and declining exports.”

She stated, “We anticipate that the [Chinese] government will continue to suffer domestic pressure over its zero-Covid policy.”

Although official figures published on Monday indicated that the economy expanded at a faster rate than anticipated between July and September, “there were still signs of stress as consumption has remained weak due to ongoing Covid-19 flare-ups and property weakness,” HSBC economist Erin Xin wrote in a note to investors.

“Due to the absence of clarity, people believe that the direction we have observed will become even stronger. This resulted in the selling and the weakening of future forecasts for the Chinese economy “The senior economist at Natixis, Trinh Nguyen, stated.

On Tuesday, Hong Kong and mainland Chinese stock markets continued their downward trend from the previous day.

On Monday, the benchmark Hang Seng index in Hong Kong fell more than 6%, while the Shanghai Composite fell 2%.