A potential US ban on Chinese technology investment could hurt these sectors

The Biden administration has said the U.S. is in competition with China and has limited the ability of U.S. companies to sell advanced chip technology to China.

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BEIJING — A ban on U.S. investment in Chinese technology could add to market volatility — but some sectors may be left untouched, Bank of America analysts said.

According to a Politico report last week, the White House is reportedly considering an executive order to ban U.S. investment in Chinese advanced technologies such as artificial intelligence, quantum computing, 5G and advanced semiconductors.

It is unclear whether such a law could be enforced. The report highlights the ongoing internal debate within the US government.

“If there is a strong investment ban for US investors, it could result in a significant supply of stocks during the grace period, resulting in potentially large volatility in the short term,” Hong Kong-based Bank of America research analysts said in a note on Tuesday. create The potential long-term impact is less clear.

Although artificial intelligence is very common in today’s online world, companies that do not have a big business in foreign artificial intelligence solutions. [will] You probably see less luck [of] These analysts said that it was targeted by the United States.

“Online travel companies, pure gaming and music companies, online verticals in automotive and real estate, certain e-commerce specialties, and e-commerce companies with a logistics focus are some examples,” says the Bank of America report.

Analysts did not mention specific stocks.

Chinese stocks have recently tried to bounce back after falling over the past two years.

The country ended its strict zero-covid policy in December. In the second half of last year, the US and China also reached an audit agreement that significantly reduced the risk of Chinese companies being delisted from US exchanges.

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Some of the US-listed Chinese stocks with the largest US institutional investor ownership by percentage include operator KFC. Chinese yamlive broadcasting company Location and pharmaceutical company Zee LaboratoryAccording to a report by Morgan Stanley on January 25.

Semiconductor Industries Co Daqo New Energy Morgan Stanley said it had roughly 27 percent U.S. institutional ownership.

The data showed Ali Baba It had the largest US institutional ownership by dollar value, but accounted for only 8.2% of the stock.

In a separate report on Monday, Morgan Stanley equity strategist Laura Wang noted that the Biden administration has focused on targeting technology with ties to China’s military.

He pointed to signs of stability in US-China relations, including the planned visit of US Secretary of State Anthony Blinken to Beijing in the coming days and the possibility of Chinese President Xi Jinping visiting the US during the Leaders’ Summit. Asia Pacific Economic Cooperation. It is scheduled to be held in San Francisco in November.

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

— CNBC’s Michael Bloom contributed to this report.

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