UPDATED – U.S. Considers Adding Alibaba and Tencent To China Stock Ban

UPDATE (8.1.2021): China said it would said necessary action to safeguard Alibaba and Tencent’s rights and interest

Chinese foreign ministry spokeswoman Hua Chunying said China would take necessary measures to safeguard companies’ rights and interests in response to the United States considering adding Alibaba and Tencent to a China stock ban, Reuters reported.

As the Trump administration considers adding Alibaba and Tencent to China stock ban, Alibaba and Tencent shares dropped on Thursday. Tencent dropped 4.7% while Alibaba fell 3.9% in Hong Kong trading on Thursday, tracking loses in the New-York listed securities, according to Bloomberg News.


Two people close to the matter said on Wednesday that the Trump administration is considering adding Chinese tech giants Alibaba and Tencent to a blacklist of companies that are claimed to be controlled or owned by the Chinese military or security services. 

As reported by the Wall Street Journal, U.S. Department of Defence officials who are in charge of blacklists haven’t made a final decision yet and are allegedly discussing adding some other Chinese companies to the blacklist as well. 

Targeting Alibaba and Tencent which have a combined market value of $1.3 trillion and of which shares are largely held by U.S. investors would be Donald Trump’s most dramatic step against Beijing in its final days. Both Alibaba and Tencent declined to make a comment. 

After the news shared on Wednesday , Alibaba closed the day with a 3.9% drop in its shares on the Hong Kong Stock Exchange while Tencent experienced a 4.7% decrease. Meanwhile, Alibaba’s United States-listed shares decreased by more than 5% on the same day.

“It’s a very bad policy and there’s enough money in Asia, lots and getting bigger, that one shouldn’t force these companies out of America,” said Thomas Caldwell, chairman of Caldwell Investment Management in Toronto and an investor in the New York Stock Exchange. “Money and markets should be neutral.” he added. 

Last November, Donald Trump signed an executive order to prevent U.S. investors from buying Chinese company shares. 

And this Tuesday, he also ordered a ban to prevent transactions with 8 Chinese firms including Alipay, QQ Wallet and WeChat Pay. 

So far, The Pentagon has blacklisted a total of 35 Chinese companies. 

Written by Maya Robertson

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

FTC settles with Tapjoy over allegations it misled users about in-game rewards

WhatsApp-alternative Signal’s downloads surge after WhatsApp Controversy and Elon Musk tweet