Bloomberg and staff reporter
The US government is considering imposing tougher sanctions on China's biggest chipmaker Semiconductor Manufacturing International Corporation (0981), and slapping investment bans on eight more Chinese companies, including top drone maker DJI.
More than 24 Chinese companies will be placed on the entity list by Biden administration in the meantime, including some involved in biotechnology, people familiar with the pending action said, as Wuxi Biologics (2269) plunged 25 percent amid fears that it could be one of the firms added to the list.
The other companies reported to be added to the Treasury Department's list of sanctioned Chinese military-industrial complex companies in which investments are banned include Megvii, SenseTime's main rival, and supercomputer manufacturer Dawning Information Industry, which operates cloud computing services in Xinjiang. Some other firms allegedly work with the Xinjiang government, such as facial recognition software company CloudWalk Technology, cyber security group Xiamen Meiya Pico, artificial intelligence firm Yitu Technology, cloud computing firm Leon Technology, and cloud-based surveillance systems manufacturer NetPosa Technologies, are also added on the blacklist today.
All eight companies are already on the commerce department's entity list, which restricts US companies from exporting domestic technology or products to the Chinese groups without a government license.
It is unclear why Chinese biotechnology firms will also be on a Commerce Department list.
However, shares of WuXi Biologics tumbled a record 25 percent yesterday before paring losses, while Sino Biopharmaceutical (1177) dropped 5 percent at the close.
The declines dragged down Hong Kong's benchmark Hang Seng Index, which fell 0.9 percent as the region's second-worst performer. The Hang Seng Hong Kong-listed Biotech Index tumbled 7 percent.
SMIC, which is already under sanctions, fell 6.4 percent yesterday. The proposal that is being examined would tighten the rules on exports to Shanghai-based chipmaker, with the US National Security Council set to hold a meeting today, said people familiar with the matter.
The moves come days after Washington sanctioned SenseTime over the alleged oppression of Uyghur Muslims in the Xinjiang autonomous region, forcing the AI leader to postpone Hong Kong's initial public offering.
It threatens to escalate tensions between Washington and Beijing, who are tussling over everything from technology supremacy to human rights.
WuXi Biologics and DJI may now be in the crosshairs. SING TAO, REUTERS
