Alibaba and WuXi AppTec decline in Hong Kong after addition to US blacklist
Designation of Chinese firms fuels investor unease, with markets bracing for a potential Fed tightening and an unwinding of the AI trade
Alibaba Group Holding and pharmaceutical contractor WuXi AppTec fell on Tuesday after the US placed them and several other Chinese companies in key emerging industries on a blacklist over alleged military links.
Alibaba slipped 1.4 per cent to HK$117.10 and WuXi AppTec tumbled 3.7 per cent to HK$116.80 in Hong Kong. Other firms on the list, including electric vehicle (EV) maker BYD and tech giant Baidu, shrugged off the Trump administration’s move and rose after trading began. The Hang Seng Index eased 0.4 per cent.
Shanghai-listed shares of WuXi AppTec retreated 2.6 per cent to 93.48 yuan.
The Pentagon said the companies met statutory criteria for designation based on factors including alleged ties with Chinese state entities, military-civil fusion programmes, the People’s Liberation Army or government industrial initiatives. That spans a wide range of China’s most strategic emerging industries, from EVs and AI to batteries, biotech and solar.
While the designation does not automatically trigger sanctions, it will make it harder for the companies to raise funds from the stock market or secure US government contracts.
“There’s no basis to conclude that Alibaba should be placed on the [list]. Alibaba is not a Chinese military company nor part of any military-civil fusion strategy,” the Hangzhou-based company said in a statement. “We will take all available legal action against attempts to misrepresent our company.”