Shares in Chinese chipmaker Semiconductor Manufacturing International Corporation, which has been sanctioned by the United States, were suspended from trading this morning in Hong Kong.
The Trump administration on Thursday added SMIC, and crude oil company China National Offshore Oil Corp (0883) to a list of alleged Chinese military companies.
Shares in CNOOC fell by more than 2 percent at HK$7.54.
The US Department of Defense designated a total of four additional companies as owned or controled by the Chinese military, also including China Construction Technology Co and China International Engineering Consulting Corp.
The move, first reported by Reuters on Sunday, brings the total number of companies sanctioned to 35. While the list did not initially trigger any penalties, a recent executive order issued by Republican President Donald Trump will prevent U.S. investors from buying securities of the blacklisted firms starting late next year.
The Chinese Embassy in Washington referred Reuters to prior remarks made by its Foreign Ministry spokesperson that “China firmly opposes the politicization of the relevant Chinese companies.”
CNOOC did not respond immediately to a request for comment.
SMIC said in a statement that it was assessing the impact of its addition to the list and said investors should be aware of the investment risks.
SMIC, which relies heavily on equipment from U.S. suppliers, was already in Washington’s crosshairs. In September, the U.S. Commerce Department informed some firms they needed to obtain a license before supplying goods and services to SMIC after concluding there was an “unacceptable risk” that equipment supplied to it could be used for military purposes.
Trading is shares of SMIC in Hong Kong was suspended following US sanctions for being tied with China's military.
China National Offshore Oil Corp has been sanctioned by the US Defense Department for links to China's military.
