Asian markets broadly declined on Friday โfollowing reports โขthe Biden administrationโ is considering new restrictions โon Chinese technology firms, potentially escalating tradeโข tensions between the world’sโฃ two largest economies. The move, aimed atโฃ preventing China from โฃacquiring advancedโค semiconductors and chipmaking tools, sent ripples through regional stock exchanges โand โstoked concerns about global economic growth.
The potential curbs build on โexisting restrictions and could substantially โฃimpact China’s technological โฃadvancement, affecting industries from artificial intelligence to electric vehicles. Investors are bracing for further retaliatory measures from Beijing,โค raising the specterโ of a โฃrenewed trade war thatโค could disrupt supply chains, โขincrease costs for businesses, and dampen consumer spending worldwide.โข The developments come as economic data from both the U.S. and china present a mixed picture, adding to marketโ uncertainty.
Japan’s โNikkei 225 closed down 0.54%, while Southโ Korea’s Kospi fell 1.44%. hong Kong’s Hangโ Seng Index โขshed 1.94% and the Shanghai Composite lostโข 0.76%. Taiwan’s benchmark index dropped 1.24%.The declines followed a negative session on wall Street,โค where the Nasdaq Composite fell 1.73% and the S&P 500 declined 0.85%โข on Thursday.
According to a report by the Wall Street Journal, the โU.S. Commerce โขDepartment is preparing to โฃunveil โขnew rules that would close loopholes allowingโฃ companies like Huawei Technologies to โคaccessโ restrictedโข technologies through third parties.The proposed restrictions would require companies selling advanced chips toโ China โto obtain licenses, effectively tightening the existing export controls.
“This is a clear escalation โin the tech war,”โค said Alicia Garcia Herrero, Chief Economist for Asia Pacific at Natixis. “The U.S. is signaling it’s willing to take more aggressive โsteps to slow China’s โคtechnological progress, even if it means disrupting โขglobal trade.”
the potential impact extends beyond โคtechnology companies. Analysts warn โthat restrictions on semiconductors couldโฃ hinder China’s โฃmanufacturing sector, impacting global supply chains already strained by geopolitical tensionsโ and the โคlingering effects of the COVID-19 pandemic. Theโ U.S.government โviewsโค limiting โChina’s accessโ to advancedโค technology as crucial for โnational security, fearing it could beโ used to enhance its military capabilities.
