US-listed Chinese Stocks Face Decline Amid AI Chip Sanctions Concerns
US-listed Chinese stocks, including Alibaba Group Holding (BABA), Baidu, Inc (BIDU), JD.com, Inc (JD), PDD Holdings Inc (PDD), NIO Inc (NIO), Li Auto Inc (LI), and XPeng Inc (XPEV), are experiencing a downturn on Friday as tensions rise between the US and China over potential restrictions on artificial intelligence technology.
Reports indicate that major chip manufacturers like Nvidia Corp (NVDA) could soon face a US embargo that would limit AI chip exports to China. This could significantly impact Nvidia's ability to ship its AI chips to countries, including China.
Also Read: Goldman Sachs shows confidence in Chinese equities as markets respond to economic slowdown and tariff issues.
In recent developments, Washington blacklisted several Chinese companies, such as gaming giant Tencent Holdings (TCEHY) and electric vehicle battery manufacturer Contemporary Amperex, due to perceived national security threats.
The atmosphere remains tense as investors grow anxious regarding the pace of China's economic recovery. Efforts to stimulate the domestic economy have not yet boosted market confidence, and the rumored semiconductor sanctions add layers of complexity to the situation.
Analyst Edith Qian from CGS International pointed out that the first half of the year is likely to be volatile for Chinese stocks, highlighting the increasing friction between the US and China as President-elect Donald Trump prepares to take office on January 20.
During this week, Hong Kong’s stock market saw a significant decrease, losing approximately $118 billion in market capitalization, as reported by the South China Morning Post. Additionally, China’s central bank has opted not to purchase more government bonds, attempting to manage the depreciation of the yuan.
The current strong performance of the US labor market has made traders hesitant to expect rate cuts from the Federal Reserve, which has contributed to a reduced interest in stocks among investors.
For those looking to invest in Chinese companies, options such as the iShares China Large-Cap ETF (FXI) and the KraneShares CSI China Internet ETF (KWEB) provide opportunities to gain exposure.
Read Also:
- Chinese Stocks Drop As Manufacturing Growth Slows And Geopolitical Tensions Hit
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stocks, China, AI