Moutai shares tumble in China after goverment restriction

New Chinese President Xi Jinping of the joined Iowa Gov. Terry Branstad when he was vice president for a toast at a State dinner in Des Moines, Iowa on February 15, 2012.

On a day like Christmas, when many markets are closed and many investors take the day off, volatility is always something to watch for.

"The [traders] that are remaining are able to take advantage of drops or increases in stock prices," says Shaun Rein, managing director of the China Market Research Group. "Last night, white alcohol manufacturers in China had their stocks drop a lot."

The markets in Japan and mainland China were opened today, and overall,  it’s been a tough week for Chinese liquor stocks. In an effort to crackdown on corruption and abusive spending, President Xi Jinping recently banned government officials from throwing lavish state banquets with pricey booze.

The move sent distillery stocks tumbling. Hit especially hard, the maker of Moutai, which can cost hundreds of dollars a bottle.

Beyond its eye-popping price, the Chinese liquor is also famed for its devastating strength. It's so powerful that during President Nixon's historic visit to China, his aides tried to keep him from drinking it. But, he toasted anyway.

About the author

Mark Garrison is a reporter for Marketplace and substitute host for the Marketplace Morning Report, based in New York.

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