By CCN: Baidu, China’s largest search engine and that country’s equivalent of Google, suffered a 16 percent stock price haircut after reporting a poor earnings quarter that stunned shareholders.

Baidu Stock in Freefall After Q1 Losses Shock Investors

Baidu stock endured a brutal crash at Friday’s opening bell, and it failed to recover along with the wider market. | Source: Yahoo Finance

As China’s economic growth continues to slide, one of its largest tech companies, Baidu, has taken a hit to advertising revenues. It reported losses of $47 million for the first quarter of 2019, with online advertising demand plunging.

CEO Robin Li blames his company’s woes on the slowing pace of China’s economic growth as well as tighter government oversight of the internet. China remains one of the most censored countries in the world. Li told investors during an earnings call:

“Although the Chinese government has announced many economic policies to bolster the economy … We are taking a cautious view that online marketing in the near term will face a more challenging environment.”

Trade Tensions To Blame?

China’s economy is now growing at its slowest pace in almost 30 years, albeit on the back of year-on-year double-digit GDP growth during the first decade of the century. Baidu relies heavily on the health of the domestic economy.

The country is now plagued by mounting uncertainty as it finds itself in the midst of escalating trade tensions with the United States. The two countries have been threatening to increase tariffs, with Walmart recently announcing plans to increases retail prices as a result of higher wholesale costs.

Two affiliates of Chinese mobile phone giant Huawei were slapped with indictments alleging ten federal crimes, including fraud and conspiracy in connection with deals in Iran.

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