Published on 20 Sep 2023 on Insider Monkey via Yahoo Finance
Why Chinese Tech Stocks Are Falling
In this article, we discuss why the Chinese tech stocks are falling. If you want to skip our detailed discussion on the Chinese stock market and technology sector, head directly to Top 5 Falling Chinese Tech Stocks.
The landscape of doing business in China is becoming progressively more arduous, as the Biden administration on August 9, 2023 announced limitations on investments in the region, especially in the technology sector. While these new restrictions compound the challenges that the world's second-largest economy is already facing due to a post-pandemic slowdown, they also highlight the mounting difficulties encountered by global companies operating within China. CNBC reported that the focal point of these new regulations are the high-tech sectors, as the executive order from President Biden is meant to prohibit private equity and venture capital firms from investing in Chinese industries like quantum computing, artificial intelligence, and advanced semiconductors. These sectors are of significant importance to China's technological ambitions, and the restrictions could potentially impede their economic and military progress. China's economic challenges have been further underscored by recent official data revealing that the country has slipped into deflation. Additionally, trade figures released by Beijing indicate a substantial decline, marking the largest drop since the onset of the pandemic. These economic setbacks are placing businesses that heavily rely on the Chinese market in a precarious position.
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