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News Potential U.S. investment ban on Chinese tech could hurt these industries

The Biden administration has said the United States is competing with China and has limited the ability of American companies to sell high-end chip technology to China.

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BEIJING — A U.S. ban on Chinese tech investment could add to market volatility — but some industries may not be affected, Bank of America analysts said.

The White House is reportedly considering an executive order that would bar U.S. investment in high-end Chinese technologies, such as artificial intelligence, quantum computing, 5G and advanced semiconductors, Politico reported last week.

It was not immediately clear if or when such a rule would take effect. The report suggests an internal debate is taking place within the U.S. government.

“If a strict investment ban is imposed on U.S. investors, it may create a large supply of stocks during the grace period, so there may be large volatility in the short term,” research analysts at Bank of America in Hong Kong said in a note on Tuesday. The potential long-term effects are less clear.”

“While AI is fairly pervasive in today’s online world, there are no companies with a large business in external AI solutions [will] may see lower chances [of] It was targeted by the US side,” analysts said.

“Online travel companies, pure-play gaming and music companies, online verticals in automotive and real estate, niche e-commerce majors, and logistics-focused e-commerce companies are some examples,” the Bank of America report said.

Analysts did not name specific stocks.

Chinese stocks have recently attempted to bounce back after a slump over the past two years.

The country ended its strict zero-Covid policy in December. In the second half of last year, the United States and China also reached an audit agreement, which greatly reduced the risk of delisting Chinese companies from American stock exchanges.

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Some of the largest U.S.-listed Chinese stocks owned by U.S. institutional investors in percentage terms include the KFC operator. Yum Chinalive company joy and pharmaceutical companies Zai Labaccording to a Jan. 25 report from Morgan Stanley.

semiconductor industry company Da new energy U.S. institutions own nearly 27 percent, Morgan Stanley said.

Data Display alibaba Has the most U.S. institutional ownership by dollar value, but it only owns 8.2% of the stock.

In a separate note on Monday, Morgan Stanley equity strategist Laura Wang noted that the Biden administration is focused on targeting technology with ties to the Chinese military.

She noted signs of stabilizing U.S.-China relations, including U.S. Secretary of State Anthony Blinken’s planned visit to Beijing in the coming days, and Chinese President Xi Jinping’s possible visit to the U.S. on the sidelines of the APEC leaders’ summit, scheduled for Nov. held in San Francisco.

The White House and China’s Foreign Ministry did not immediately respond to requests for comment on the Politico report.

— CNBC’s Michael Bloom contributed to this report.

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