Alibaba shares lead Chinese tech losses as senators call for cloud sanctions
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Alibaba (NYSE:BABA) and other leading Chinese tech and Internet companies saw their share stumble as trading progressed Tuesday as a group of U.S. senators called for sanctions on a handful of Chinese cloud service providers.
The nine Republican senators, led by Tennessee Senator Bill Hagerty, sent the letter to the U.S. Commerce, State and Treasury departments, according to a report from Reuters, which said it had seen the letter. The senators want the Biden Administration to impose sanctions on Huawei Cloud and several other Chinese cloud companies due to national security concerns related to the companies ties to the Chinese military. Huawei has been on a Commerce Department blacklist for four years because of issues related to how it shares information with the Chinese government.
Alibaba (BABA) shares fell more than 5% as its Alibaba Cloud service was included on the senators' list of companies to be sanctioned. Baidu (NASDAQ:BIDU) was off by almost 5% as its Baidu Cloud business made the senators' list, and Tencent Holdings (OTCPK:TCEHY), with its Tencent Cloud service, fell almost 3% in late trading.
While the senators request doesn't mean there will be any immediate change in U.S. policy toward the Chinese companies, it is still likely to ratchet up the tension between the United States in China over the sale of technology products such as semiconductors, and what social media giant TikTok does with the information of its U.S. users.
Other Chinese tech and Internet stocks in the red included JD.com (NASDAQ:JD), down by 3%; gaming company NetEase (NTES), which fell more than 6%; Weibo (WB), which gave up more than 2% and PDD Holdings (PDD), down by almost 4%.
The KraneShares CSI China ETF (KWEB) was off by more than 3%.
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