Shares in Chinese health-care and technology companies plummeted on Wednesday following news that the US will put more Chinese companies to its investment and export blacklists this week, including the world’s largest commercial drone manufacturer and biotech companies.
On Thursday, the US will add eight Chinese businesses to an investment blacklist, including DJI Technology Co Ltd, the world’s top commercial drone manufacturer.
According to the report, the US Commerce Department plans to place more than two dozen Chinese enterprises, including several involved in biotechnology, on a “entity list” on Thursday, preventing US corporations from exporting to them.
In afternoon trade, the news escalated a sell-off in Chinese health-care stocks, knocking 3.2 percent off a mainland index that tracks the industry, compared to a 0.87 percent decline in the broader index.
The impact was even more pronounced in Hong Kong, where the Hang Seng Healthcare Index fell 7.6% in late afternoon trading. On Wednesday, health-care companies were already under pressure after Chinese biotech company BeiGene Ltd fell on its Shanghai debut, amid fears that certain Chinese companies could be required to delist from the US stock market.
Because of their suspected involvement in monitoring of the Uyghur Muslim minority, the US Treasury Department will place eight businesses on its “Chinese military-industrial complex corporations” blacklist on Thursday, including DJI.
Enterprises on the list, which presently includes about 60 companies, are off-limits to US investors.
DJI claimed at the time that it had done nothing to justify the decision and that it would continue to sell its goods in the US, where it had built up a sizable market.
The new additions came just days after SenseTime Group, an artificial intelligence start-up, was placed on the same Treasury list, delaying its $767 million Hong Kong initial public offering (IPO). The allegations levelled against SenseTime were false, according to the company.
More than a million people, mostly Uyghurs and members of other Muslim minorities, have been incarcerated in a huge system of camps in China’s far-western region of Xinjiang in recent years, according to UN experts and rights groups.
The treatment of Uyghurs has been labelled genocide by certain foreign parliamentarians and parliaments, citing evidence of forced sterilisations and deaths inside the camps. These allegations are denied by China, which asserts that Uyghur population growth rates are higher than the national average.