Shares in Alibaba and Tencent sank after a report that the Trump administration may block US investment in Chinese tech groups, threatening a sharp escalation in tensions between Washington and Beijing.
Shares of Chinese companies listed in Hong Kong fell nearly 4 percent on Thursday, after the Wall Street Journal mentioned Officials are studying measures against the largest Chinese companies listed in the United States. Hong Kong’s Hang Seng Index Decreased 0.5 percent.
Such a move would be included in the current advertiser blacklist of companies November last year Under an executive order, blocking investments in 31 Chinese companies that Washington suspects have ties to the Chinese military.
Shares in Alibaba and Tencent also fell on Wednesday in New York, with the companies’ combined market value of more than $ 1.3 trillion. The listing of Alibaba in the US in 2014 was, at that time, the largest in history.
Expanding the current executive order to include Alibaba and Tencent risks a major escalation of tensions between the world’s two largest economies, which have significantly worsened over the past year.
If the Pentagon added tech groups to its list of companies with alleged Chinese military links, then US President Donald Trump’s executive order would prevent US investors from trading their shares from January 11th.
It would have been difficult to determine the extent of the impact if Trump went ahead with the ban, said Ki Yan, an analyst at DZT Research. He said, “More details are needed to assess the impact, such as the definition of American investors, the place of trading for the listed entity subject to the embargo, and most importantly, the reasons for this ban.”
The executive order, which was Trump’s first major political response after losing the 2020 presidential election to Joe Biden, has already had an impact on Chinese companies listed in the United States.
On Wednesday, New York Stock Exchange Has been confirmed It will write off three state-owned Chinese telecom companies next week: China Mobile, China Telecom and China Unicom.
The New York Stock Exchange originally announced plans to write off the companies on December 31 however Reverse path On Monday before returning to its previous plan later this week.
Mr. Trump earlier this week Go to blocking Transactions with Chinese payment apps including Alipay and WeChat Pay, linked to Alibaba and Tencent, respectively.
In late December, the US announced that, too Subsidiaries From Chinese companies will also be included in the ban.
In the same month, the Trump administration added Semiconductor Manufacturing International Corp., China’s largest chip maker, and drone company DJI. To the export blacklist.
Alibaba has its own challenges in China, where it has a problem Antitrust investigationAnd as regulators look into the future of its sister company, Ant Group, after canceling a planned $ 37 billion initial public offering in November.
Jack Ma, the founder of both Alibaba and Ant, has not appeared in public since late October as the organizers revolve around his business.
Alibaba and Tencent declined to comment.