[The Epoch Times, September 13, 2022](The Epoch Times reporter Li Xin compiled and reported) The latest U.S. effort to reduce reliance on Chinese products and markets has dealt a heavy blow to China’s biotech stocks. As investors expect more signs of decoupling between the U.S. and Chinese economies.
U.S. President Biden signed an executive order on Monday (September 12) to provide more government funding to the U.S. biotechnology industry to reduce the U.S.’s reliance on foreign companies, especially Chinese companies, in the field. As soon as the move came out, on Tuesday (September 13), two subsidiaries of China’s Wuxi Biologics Co. ) Inc.” and Shanghai WuXi AppTec Co. fell at least 16 percent in Hong Kong.
Biden’s executive order, the latest action after the U.S. restricted exports of advanced chips to China, underscores heightened strategic competition between the two countries and adds to selling pressure on Chinese stocks.
“I don’t think the market has fully priced in the risk of a Sino-U.S. conflict. That’s why healthcare companies tumbled today,” Paul Pong, managing director of Pegasus Fund Managers Ltd. in Hong Kong, told Bloomberg. “The competition between China and the U.S. in aerospace, artificial intelligence manufacturing and other fields is still fierce, and it is not surprising to see U.S. sanctions.”
On Tuesday, Pharmaron Beijing Co., Asymchem Laboratories Tianjin Co. and WuXi AppTec were the worst performers in the CSI 300 Index. Shares fell by at least 10%. The benchmark closed up 0.4%. In Hong Kong, shares of WuXi Biologics fell nearly 20%, the biggest drag on the Hang Seng Index.
Any additional sanctions or export restrictions from the U.S., China’s largest trading partner, would hit Chinese stocks, especially as China’s economic outlook is under pressure from a “zero-out” policy from the coronavirus (COVID-19).
Responsible editor: Li Huanyu#