Jack Ma, CEO of Chinese e-commerce giant Alibaba, speaks during his visit to the start-up and innovation fair Vivatech in Paris on May 16, 2019.
Philippe Lopez | AFP | Getty Images
The shares of Alibaba and Tencent fell sharply on Thursday after a report, citing several people familiar with the matter, suggesting that the Trump administration could be on the verge of adding Chinese tech giants to the U.S. black list.
Conglomerates saw their shares on the Hong Kong stock market drop about 4% after The Wall Street Journal report said that authorities were considering banning Americans from investing in companies.
The United States government blacklisted 31 Chinese companies in November because of concerns that they would support the Beijing military through an executive order. US state and defense officials have discussed expanding the executive order so that the black list includes more companies, according to anonymous sources cited by the WSJ.
When the Hong Kong stock exchange closed, the price of Tencent’s shares fell 4.69% to 568.5 Hong Kong dollars, while the price of Alibaba’s shares fell 3.91% to 221 Hong Kong dollars. .
If they are added to the United States’ blacklist, American investors will not be able to trade their shares as of January 11. Those who already own shares in the companies would have until November to download them.
Trump signed the initial executive order shortly after losing the 2020 presidential election to Joe Biden and is already having consequences. The New York Stock Exchange confirmed on Wednesday that it plans to withdraw capital from China Mobile, China Telecom and China Unicom.
On Tuesday, the Trump administration decided to ban Chinese payment apps, including Alipay and WeChat Pay, which are linked to Alibaba and Tencent, respectively.
In December, the US added Chinese drone company DJI and Semiconductor Manufacturing International to a business blacklist. The U.S. Department of Commerce said the action against SMIC “stems from China’s civil-military fusion (MCF) doctrine and evidence of activities between SMIC and concerns in the Chinese military industrial complex.”
Alibaba’s battles go beyond the United States and its territory, where Chinese regulators recently launched an antitrust investigation against the company.
Jack Ma, founder and CEO of Alibaba, is keeping a low profile and has not been seen in public since last October, after he appeared to criticize the country’s regulators.
Alibaba and Tencent did not immediately respond to CNBC’s request for comment.