Tech giant Tencent was China's most valuable company for 6 years. In September, it finally lost the title — to a liquor company.

• Chinese tech giant Tencent's value has dropped to the worth of a local Chinese liquor giant.
• Kweichow Moutai overtook what was once China's most valued company in September.
• It's a further sign of Tencent's fall from dominance and the result of curbs on the tech industry.

Tencent's nearly six-year reign as China's most valued company may be over.

Once worth nearly $1 trillion, the gaming and internet giant now hovers at less than half of its peak market value. On September 30, Tencent lost its status as China's most valuable company when its market capitalization dipped below that of Guizhou-based distiller Kweichow Moutai.

That means its value fell from $950 billion in January 2021 to around $325 billion in less than 22 months, per Bloomberg.

As of Tuesday afternoon, Tencent has regained a narrow lead over Kweichow Moutai, with a market capitalization of $302.5 billion to Kweichow Moutai's $300.1 billion, per Bloomberg's data.

Kweichow Moutai is a household name in China. Its iconic Moutai Baijiu is a fiery 53% alcohol liquor that's commonly consumed during business dinners. The drink was famously served to Richard Nixon on his historic 1972 trip to China.

The distiller's profits surged 19.1% in the last nine months, which analysis group Yicai Global attributed to an uptick in sales at the distiller's brick-and-mortar stores and the success of its new online retail platform, iMoutai.

Tencent did not immediately respond to Insider's request for comment.

Harsh restrictions on tech giants spelled the end of Tencent's glory days

That Kweichou Moutai's market value could even be compared to Tencent's shows how far the tech behemoth has fallen.

Tencent's star status was thought to have been cemented during the mid-2010s when its powerhouse app, WeChat, became the super app for every online service imaginable — from texting and video calls to gaming, restaurant bookings, ride-hailing, food delivery, and paying bills. 

WeChat's built-in payment platform, WePay, is rivaled only by Alibaba's Alipay in a country where cashless payment is so ubiquitous that even beggars in Beijing use it to ask for change by displaying QR codes on makeshift signs.

Tencent's rapid descent came less than a year after it posted a $950 billion market capitalization in January 2021, when its value was growing nearly twice as fast as Tesla's, according to Bloomberg. At the time, another tech juggernaut, Alibaba, saw its fortunes fouled and its historic IPO plans ruined when China accused it of violating its restrictions on forming monopolies.

Beijing's regulatory measures came for Tencent, too, in 2021, when the Chinese government introduced new rules on antitrust between internet companies and clamped down on video gaming for Chinese minors.

In November, Tencent was told it would have to receive approval from regulators before publishing any new apps or sending updates to devices.

This drive to curb the Chinese tech industry's previously unbridled growth comes directly from President Xi Jinping, who has regularly promoted "common prosperity," or the idea of redistributing China's wealth among the nation. In August, Xi lauded his government's efforts to halt "barbarous growth" and "irrational expansion" from the tech sector. 

The Chinese leader has also shown no indication that he's changed his stance. Xi exhorted the need for a "common prosperity" during his speech at this week's Communist Party Congress, which opened on Sunday.

Xi is expected to secure a third term and consolidate his position as China's paramount leader at the landmark meeting.