Chinese tech shares tumble after US publishes new export rules

Chinese tech shares tumble after US publishes new export rules

SHANGHAI, Oct 10 (Reuters) – Shares in Chinese tech giants Alibaba Group (9988.HK) and Tencent (0700.HK) as well as in chipmakers slumped on Monday, following the latest US crackdown on China’s chipmaking industry to slow Beijing’s technological and military advances.

The Biden administration published a sweeping set of export controls on Friday, including a measure to cut China off from certain semiconductor chips made anywhere in the world with US equipment.

The rules include blocking shipments of a broad array of chips for use in Chinese supercomputing systems that nations around the world rely on to develop nuclear weapons and other military technologies.

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Some industry experts say the ban could also hit commercial data centers at Chinese tech giants.

Shares in Alibaba and Tencent dropped 3.3% and 1.7%, respectively, by 0258 GMT on Monday.

An index measuring China’s semiconductor firms (.CSIH30184) tumbled nearly 6%, and Shanghai’s tech-focused board STAR Market (.STAR50) declined 3.6%.

The raft of measures could amount to the biggest shift in US policy toward shipping technology to China since the 1990s. If effective, they could hobble China’s chip manufacturing industry by forcing American and foreign companies that use US technology to cut off support for some of China’s leading factories and chip designers.

China’s Semiconductor Manufacturing International Corp (SMIC) (0981.HK) dropped 3.8%, NAURA Technology Group Co (002371.SZ) sank 10% by the daily limit, and Hua Hong Semiconductor Ltd (1347.HK) plunged 9.5%.

Citi analysts said in a note that the US restrictions could make development of China’s advanced chip technologies even more challenging.

“(But) they should increase Chinese semiconductor companies’ propensity to purchase domestic equipment, especially for mature technology nodes, due to supply-chain security,” the note said.

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Reporting by Jason Xue and Josh Horwitz; Editing by Muralikumar Anantharaman

Our Standards: The Thomson Reuters Trust Principles.


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