Earlier this month, PDD founder Colin Huang usurped water baron Zhong Shanshan atop the list of Chinese billionaires.

As of August 19, Huang, a former Googler, was worth more than $53 billion on paper, $3 billion short of his own, personal net worth record, but enough to make him the richest man in China.

That’s a crown I wouldn’t want, frankly. Particularly not as a tech founder. Xi Jinping harbors what, at times, looks like a pathological aversion to excess. That can manifest in ways that are injurious to the country’s tech entrepreneurs, the most famous example being Jack Ma, who Xi drove into exile four years ago, when the notoriously flamboyant mogul flew too close to the sun. (Mayday, mayday! Icarus goin’ down!)

A few days ago, The Economist described Huang as “the kind of tech billionaire the Communist Party can accept.” “When Huang bec[ame] China’s richest man, his public reaction was typical: Utter silence,” the linked article read, adding that Huang “thrived while toeing the party line and keeping quiet.”

That works until it doesn’t. There are no billionaires the CCP “can accept.” “Tolerate” is probably a better word, but even that’s stretching it. As a billionaire in China, “toeing the party line and keeping quiet” is like making no sudden movements if you find yourself in close proximity to an apex predator in the wild: It increases your chances of survival, but by no means guarantees it.

Anyway, Huang’s “reign on the top was short like leprechauns,” to channel the late Christopher Wallace. He (Huang, not Wallace) lost $14 billion in a single day this week.

As the figure shows, Huang had one helluva rough day, losing all of his 2024 wealth gains. He hasn’t been this poor since October.

I’d say Huang’s misfortune had nothing to do with Xi, but that wouldn’t be entirely true. After all, Xi’s policies (sticking to draconian COVID lockdowns two and a half years into the pandemic when he could’ve imported the mRNA vaccines, the property crackdown which continues to bedevil the Chinese economy and his generalized refusal to consider the distinct possibility that the Chinese people are in a better position to say what they want out of life than a 50-years-dead dictator) have depressed consumer sentiment such that domestic demand is anemic on good days and moribund on all the others.

PDD — which of course owns Temu — saw its shares lose nearly a third of their value this week after the company missed on the top-line and sounded an overtly cautious tone on the outlook.

The decline was the largest on record. And it wasn’t close. In dollar terms, the damage came to $55 billion.

Huang’s co-founder was forthcoming. Too forthcoming, if you ask me. On the earnings call, Chen Lei told analysts that brisk revenue growth is “not sustainable” and said it was “inevitable” that profitability would slip.

Here’s a little advice that Chen didn’t ask for: If that’s what you think, you just lie. Or you employ a bunch of euphemisms. What you don’t do, under any circumstances, is jump on the call and say, basically, “There’s no way we’re going to be able to grow sales at anything like the pace you’ve all come to expect, and as for the bottom-line, well, just forget about it. We’re f–ked. Inevitably. Inevitably f–ked.”

PDD didn’t blame Xi. Certainly not directly, by name (do that if you want to see what “inevitably f–ked” really looks like). But not indirectly either. The company put a lot of emphasis on competition and not enough on tepid demand. The problem is consumer psychology. Period.

You can parse results from China’s e-commerce platforms all you want and make all the excuses you care to make, but the inescapable (“inevitable” as Chen might put it) bottom line is this: If consumers are optimistic about the labor market, in good spirits and spending, the rest will take care of itself. None of that describes the Chinese consumer currently. Hence slower sales and a worsening profit outlook.

As discussed as some length here two weeks ago, China seems destined for a prolonged struggle to rescue domestic demand. All signs point to mild deflation, and the government has shown no signs of being prepared to do what’s necessary on the fiscal side to short circuit the disinflationary doom loop.

Things aren’t all bad for PDD, though. Despite missing estimates, revenue growth last quarter was still 86%.