{"id":14725,"date":"2025-04-11T07:50:48","date_gmt":"2025-04-11T07:50:48","guid":{"rendered":"https:\/\/topat10.com\/?p=14725"},"modified":"2025-04-11T07:50:48","modified_gmt":"2025-04-11T07:50:48","slug":"china-tech-faces-worry-beyond-tariffs-after-350-billion-wipeout","status":"publish","type":"post","link":"https:\/\/topat10.com\/?p=14725","title":{"rendered":"China tech faces worry beyond tariffs after $350 billion wipeout"},"content":{"rendered":"\n<p>Even as China\u2019s tech stocks begin to recoup some of their <a href=\"https:\/\/fortune.com\/asia\/2025\/04\/07\/trump-tariffs-asia-market-plunge-hang-seng-nikkei\/\">recent big losses<\/a>, some investors and analysts are eyeing looming concerns that may have <a href=\"https:\/\/fortune.com\/asia\/2025\/04\/05\/trump-liberation-day-tariffs-no-leader-world-trade\/\">a worse impact<\/a> than Donald Trump\u2019s tariffs.<\/p>\n<p>The Hang Seng Tech Index has shed more than $350 billion in market value since <a href=\"https:\/\/fortune.com\/asia\/2025\/03\/28\/wall-street-china-deepseek-policy-investor-confidence-returns\/\">a March high<\/a>, though it has gained more than 10% over the past four sessions. While China\u2019s <a href=\"https:\/\/fortune.com\/asia\/2025\/03\/30\/deepseek-ai-china-us-silicon-valley\/\">rapid AI development<\/a> remains a key positive, heightened geopolitical tensions are at the forefront at the moment.<\/p>\n<p>U.S. actions against China such as restrictions on financial holdings or further sanctions are a \u201cserious risk,\u201d according to Bush Chu, an investment manager at Aberdeen Investments. There has also been unverified chatter over potential forced delistings of Chinese stocks from U.S. exchanges, and some fear further restrictions on <a href=\"https:\/\/fortune.com\/2022\/10\/10\/us-biden-china-semiconductors-chips-export-controls\/\">technology access<\/a>.<\/p>\n<p>Such measures could cause a \u201csharp selloff\u201d of heavily foreign-owned China tech stocks, Chu said. \u201cI think a lot of things are not yet priced in,\u201d he said, also highlighting the broader impact on demand if tariffs weaken China\u2019s overall economy.<\/p>\n<p>China\u2019s economy may suffer broadly from Trump\u2019s aggressive hike in tariffs to 145% and the decoupling of the two nations. At the same time, the sector\u2019s high index weightings and foreign ownership have broad ramifications for China\u2019s markets.<\/p>\n<p>With the U.S.\u00a0raising\u00a0tariffs applied to small parcels that were <a href=\"https:\/\/fortune.com\/2025\/04\/04\/the-tariff-loophole-that-drove-shein-and-temu-to-fast-fashion-dominance-is-closing-in-a-month\/\">previously exempt from duties<\/a>, Chinese e-commerce firms have been hit hardest. American depositary receipts of Temu owner PDD Holdings Inc. have slumped 25% since the start of April. ADRs of Alibaba Group Holding Ltd., the largest Chinese firm listed in the U.S., are down 21%.<\/p>\n<p>The direct tariff impact is seen as small outside of online shopping, with the majority of China tech\u2019s revenue and profits coming from domestic business. But non-tariff means may be deployed as well as tensions ramp up.<\/p>\n<p>In February, the Trump administration released a policy memo that <a href=\"https:\/\/fortune.com\/asia\/2025\/02\/25\/trumps-america-first-investment-policy-could-threaten-hundreds-of-chinese-companies-listed-in-the-u-s\/\">potentially calls into doubt<\/a> the mechanism for Chinese listings in the U.S. That reminded investors of episodes in\u00a02021\u00a0and\u00a02022, when the <a href=\"https:\/\/fortune.com\/2022\/04\/16\/china-us-listed-companies-delisting-stock-exchange-wall-street-deal-audits-congress\/\">specter of mass delistings<\/a> from U.S. exchanges dragged on China\u2019s markets.<\/p>\n<p>\u201cGiven how high Trump already has pushed up tariffs against China, we believe delisting is moving up in the list of retaliatory options,\u201d TD Cowen analyst Jaret Seiberg wrote in a note dated Wednesday. \u201cThat means risk is higher this week than last week for action.\u201d<\/p>\n<p>The U.S. Department of Defense has <a href=\"https:\/\/fortune.com\/asia\/2025\/01\/07\/tencent-catl-us-blacklist-chinese-military-company-shares-plunge\/\">already blacklisted<\/a> Tencent Holdings Ltd., China\u2019s largest company by market cap, and others. While the Pentagon\u2019s\u00a0<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2025-01-06\/us-adds-tencent-to-chinese-military-blacklist-shares-decline\" target=\"_blank\" rel=\"noreferrer noopener\">list<\/a>\u00a0carries no specific sanctions, it discourages U.S. companies and agencies from dealing with these Chinese firms.<\/p>\n<p>The options market shows investors are nervous. The cost of hedging against declines in Chinese tech giants like Tencent and Alibaba remains near multi-year highs, after soaring the most among Hang Seng China Enterprises Index companies in the recent rout.<\/p>\n<p>China\u2019s tech stocks had been all the rage earlier this year as DeepSeek\u2019s success <a href=\"https:\/\/fortune.com\/asia\/2025\/02\/21\/china-tech-earnings-baidu-alibaba-lenovo-deepseek-ai\/\">drove investors<\/a> into the nation\u2019s listed AI plays. The worsening trade war has shifted attention back to U.S. efforts to limit Chinese access to the most cutting edge tech.<\/p>\n<p>\u201cWhile we are not sure whether the U.S. plans to announce any new restrictions on chip export, there have been concerns that tech companies that have cloud services and proprietary AI foundation models\/capability could be under scrutiny and sanction,\u201d Citigroup Inc. analysts including Alicia Yap wrote in a note. This could put pressure on Tencent, Alibaba and Baidu Inc., they added.<\/p>\n<p>The sector still has valuation appeal, with the Hang Seng Tech Index trading at 15 times estimated forward earnings, below its three-year average level of 19 times and the Nasdaq 100 Index\u2019s current level of 24 times.<\/p>\n<p>The cohort\u2019s heavy reliance on domestic demand also puts them in line to gain from Beijing\u2019s efforts to support the economy.<\/p>\n<p>\u201cChinese tech leaders are still relatively attractive,\u201d said Aberdeen\u2019s Chu. \u201cWhether investors want to get into China stocks right now just to capture the AI opportunities &#8230; they may pause a bit for now given the great uncertainties, and they might re-enter if they obtain more clarity on the tariff, on the global economy.\u201d<\/p>\n<p>This story was originally featured on <a href=\"https:\/\/fortune.com\/asia\/2025\/04\/11\/china-tech-faces-worries-trump-tariffs-hang-seng-index\/\" target=\"_blank\">Fortune.com<\/a><\/p>\n\n","protected":false},"excerpt":{"rendered":"<p>Even as China\u2019s tech stocks begin to recoup some of their recent big losses, some investors and analysts are eyeing looming concerns that may have a worse impact than Donald Trump\u2019s tariffs. The Hang Seng Tech Index has shed more than $350 billion in market value since a March high, though it has gained more [&hellip;]<\/p>\n","protected":false},"author":750,"featured_media":14726,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[123],"tags":[],"class_list":["post-14725","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>China tech faces worry beyond tariffs after $350 billion wipeout | Unlock Informed Choices with Us<\/title>\n<meta name=\"description\" content=\"The Hang Seng Tech Index has shed more than $350 billion in market value since a March high.\" \/>\n<meta name=\"robots\" content=\"index, follow, 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Yang, Bloomberg","author_link":"https:\/\/topat10.com\/?author=750"},"uagb_comment_info":1,"uagb_excerpt":"Even as China\u2019s tech stocks begin to recoup some of their recent big losses, some investors and analysts are eyeing looming concerns that may have a worse impact than Donald Trump\u2019s tariffs. 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