As the United States government continues its crackdown on companies with potential ties to the Chinese military, Alibaba Group Holding Ltd. and Tencent Holdings Ltd. may become the U.S. government’s next targets.
According to the Wall Street Journal, the United States is currently considering a plan that would see restrictions being placed on investments in these two companies by American citizens.
According to multiple reports, the U.S. government is currently assessing the long term effects that one such move would have on the markets. However, it’s still not clear if the U.S. will go through with this proposal.
Last Tuesday, the New York Stock Exchange contemplated the delisting of three Chinese telecommunications giants from its indexes—China Telecom Corp. Ltd., China Mobile Ltd., and China Unicom. This move would be made as a means of compliance with a recent executive order from the U.S. government which was enforced with the aim of preventing Americans from buying shares from companies with alleged ties to the Chinese military.
As a result of these recent developments, Alibaba stocks declined by 5% while Tencent’s fell by 3% during Wednesday’s afternoon trading.
