U.S. Considers Ban On China's Alibaba, Tencent

alibaba jan07 lt

U.S. President Donald Trump's administration is discussing to add Chinese majors Alibaba Group Holding Ltd and Tencent Holdings Ltd. to a blacklist of companies allegedly owned or controlled by the Chinese military, multiple reports said citing people familiar with the plan.

Trump in November had signed an executive order banning U.S. investors from buying shares of the blacklisted firms starting in November, 2021. The U.S. government's initial blacklist included 31 companies allegedly having ties to China's military and security services.

As per reports, the U.S. officials are also discussing adding other Chinese firms to expand the blacklist. The proposed plan to ban the Chinese majors would prohibit Americans from investing in these companies.

Among various developments against several Chinese companies allegedly posing threat to U.S. national security, Trump this week signed an executive order to ban transactions with eight Chinese software applications, including Alipay mobile payment app owned by Alibaba's Ant Group, and Chinese tech giant Tencent's QQ Wallet and WeChat Pay, among others.

Further, the New York Stock Exchange now said it will delist three Chinese telecom companies targeted by a Trump executive order, to comply with the U.S. law. The latest decision follows new specific guidance from the Department of Treasury, despite scrapping the plan earlier. The companies are China Telecom Corporation Limited, China Mobile Limited, and China Unicom (Hong Kong) Limited.

The news of impending ban has taken the shares of Alibaba down around 4 percent and Tencent down around 5 percent in the Hong Kong trading on Thursday. Further, following the news of NYSE delisting, China Telecom, China Mobile, and China Unicom shares were down 9.4 percent, 7.2 percent and 11.4 percent, respectively.

Trump in August had signed executive orders directing Commerce department to block some U.S. transactions with WeChat and the Chinese-owned video app TikTok. However, those restrictions were blocked by courts mainly citing freedom of speech.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT