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China Tech Stocks Slide as Tensions With U.S. Rise Again

(Bloomberg) — Chinese tech stocks dropped as Sino-U.S. tensions flare up again with Washington moving to restrict the Asian nation’s companies and calling for a greater role by Taiwan in the United Nations.

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The Hang Seng Tech Index, which tracks mostly Chinese technology firms traded in Hong Kong, declined as much as 3.4%. More broadly, the CSI 300 Index slid as much as 0.9%, while the Hang Seng Index lost 1.8%.

U.S. Secretary of State Antony Blinken said in a statement Tuesday that the exclusion of Taiwan, which China considers part of its territory, from the UN “undermines the important work” of the international body. On the same day, the Federal Communications Commission voted to force China Telecom, one of three leading communications providers in China, to close its U.S. business.

“The revoking of China Telecom’s operating license seems to dampen previous hopes that the U.S.-China relations may be turning for the better,” said Jun Rong Yeap, a market strategist at IG Asia Pte. “The move has raised some doubts as to whether further escalation may bring back more U.S. scrutiny on Chinese technology players.”

Though China Telecom doesn’t do a lot of business in the U.S., being barred from the market is significant, after moves against other giants of China’s burgeoning tech industry, including Huawei Technologies Co.

The stock declines followed a slump in Chinese shares listed in the U.S. overnight, with the Nasdaq Golden Dragon China Index tumbling more than 4% in its biggest loss in more than a month.

READ: China Stocks Traded in New York Slip With More U.S. Tension

(Updates throughout.)

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