China’s technology shares fell after the US published new export rules

SHANGHAI, Oct 10 (Reuters) – Shares in Chinese technology giants Alibaba Group ( 9988.HK ) and Tencent ( 0700.HK ) also fell on Monday. Military developments.

The Biden administration has issued sweeping export controls, including a move to cut China off from certain semiconductor chips made by U.S. equipment anywhere in the world.

The rules include a broad ban on shipments of chips used in Chinese supercomputing systems that governments around the world rely on to develop nuclear weapons and other military technology.

Some industry experts said the ban could hit business data centers at Chinese tech giants.

Shares in Alibaba and Tencent were down 3.3% and 1.7% by 0258 GMT on Monday.

An index measuring Chinese semiconductor firms ( .CSIH30184 ) fell 6%, and Shanghai’s technology-focused board STAR Market ( .STAR50 ) fell 3.6 percent.

The expansion of the measures could mark the biggest shift in U.S. policy toward exporting technology to China since the 1990s. If successful, they could disrupt China’s chip manufacturing industry by forcing U.S. and foreign companies that use U.S. technology to end support for some of China’s leading factories and chip designers.

China Semiconductor Manufacturing International Corp (SMIC) (0981.HK) fell 3.8%, Naora Technology Group Co (002371.SZ) fell 10% on the day, and Hua Hong Semiconductor Ltd (1347.HK) fell 9.5%.

Citi analysts said in a note that the US ban would make China’s development of advanced chip technologies more challenging.

“(However) due to supply chain security, Chinese semiconductor companies should increase their propensity to purchase domestic equipment, especially for mature technology nodes,” the note said.

Reporting by Jason Xue and Josh Horwitz; Editing by Muralikumar Anatharaman

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