Private companies in China are practised at staying one step ahead of their government. Western investors are less sure-footed. A Chinese crackdown on new online lenders extended the selloff in shares of micro-lender Qudian, which listed in the US last month. The stock closed more than a fifth below its listing price on Tuesday.

The Alibaba-backed credit service announced a $100m buyback programme amounting to less than 2 per cent of the public float on the same day that the news broke. Given it only just sold stock to the US public, and had negative equity of $357m as of June, this is a curious use of the proceeds. The move may, however, help prop up the value of chief executive Min Luo’s billion-dollar stake in the controlling share class.

China has not banned online lending for existing companies. But even if Qudian benefits from reduced competition, its business model is exposed to other regulatory headwinds. The People’s Bank of China on Friday said it would prohibit asset-management products that guarantee investment returns from next summer. The group relies on similar funding channels for its own lending activity. It records service fees for facilitating loans by trusts and banks, but remains liable for principle and interest shortfalls.