On Thursday, a huge fall in Alibaba and Tencent shares has been noticed which is referring that several people familiar with the matter. It is assumed that the Trump administration might add the Chinese tech giants to a U.S. blacklist.
As soon as the reporters from The Wall Street Journal said that the officials were considering prohibiting Americans from investing in the firms, the conglomerates found their shares on the Hong Kong stock exchange slide by 4%.
On November, 31 Chinese companies were blacklisted by the U.S. government over concerns that they supported Beijing’s military through an executive order for which the includes more companies as per an anonymous cited by WSJ.
When the Hong Kong stock exchange closed, Tencent’s share price was down 4.69% to 568.5 Hong Kong dollars, while Alibaba’s share price was down 3.91% to 221 Hong Kong dollars.
If they do get added to the U.S. blacklist, then American investors won’t be able to trade their stocks from Jan. 11. Those that already own shares in the companies would have until November to offload them.
After losing the 2020 presidential election to Joe Biden, Trump signed the initial executive order shortly. On Wednesday, the New York Stock Exchange confirmed that it plans to delist China Mobile, China Telecom, and China Unicom.
However, the Trump administration is moving to ban Chinese payment apps which include Alipay and WeChat Pay that are linked with Alibaba and Tencent respectively.
The U.S. Commerce Department said the action against SMIC “stems from China’s military-civil fusion (MCF) doctrine and evidence of activities between SMIC and entities of concern in the Chinese military-industrial complex.” In December, the U.S. added the Chines drone company DJI and Semiconductor Manufacturing International to the trade blacklist.
Not only in U.S. Alibaba’s battles extended to its home turf. The Chinese regulator has currently launched an antitrust investigation against the company. Alibaba’s founder and CEO Jack Ma is keeping a low profile and isn’t seen in public since last October after he appeared to criticize the Country’s regulators.