China’s heated rivalry with the U.S. over tech supremacy is adding fresh pain points to the world’s second-largest stock market, as the Biden administration steps up efforts to reduce economic reliance on the Asian nation.
From biotech to electric vehicles, shares of China’s key manufacturers have seen heavy selling recently as U.S. initiatives to secure domestic supply chains and solidify its industrial superiority raised uncertainties for Chinese firms. The MSCI China Index has fallen more than 7% this month, versus a 2.5% drop in the global gauge.
Investors also worry that rising tension over Beijing’s stance toward Russia and Taiwan may accelerate the economic decoupling. President Xi Jinping’s meeting with his Russian counterpart last week has been closely watched by traders for any gesture that may provide basis for U.S. sanctions.