A potential U.S. ban on investment in Chinese tech could hurt these sectors

BEIJING — A prohibition connected U.S. concern successful Chinese tech could thrust up marketplace volatility — but immoderate sectors whitethorn flight untouched, Bank of America analysts said.

The White House is reportedly considering an executive bid to prohibition U.S. concern into high-end Chinese tech, specified arsenic artificial intelligence, quantum computing, 5G and precocious semiconductors, according to a Politico study past week.

It's unclear whether oregon erstwhile specified a regularisation mightiness instrumentality effect. The study indicated ongoing interior statement wrong the U.S. government.

"If determination were a strict concern prohibition connected US investors, it could make a important proviso of shares implicit the grace play and hence imaginable ample volatility successful the adjacent term," Bank of America's Hong Kong-based probe analysts said successful a enactment Tuesday. "Potential semipermanent interaction is little clear."

"Though AI is rather prevalent successful today's online world, companies that don't person a ample concern successful outer AI solutions [will] apt spot a little accidental [of] being targeted by the U.S. side," the analysts said.

"Online question companies, pureplay crippled and euphony companies, online verticals successful car and existent estate, niche eCommerce specialties, and logistics-focus eCommerce companies are immoderate of the examples," the Bank of America study said.

The analysts did not sanction circumstantial stocks.

Chinese stocks person precocious tried to rebound aft a plunge successful the past 2 years.

The state ended its stringent zero-Covid argumentation successful December. In the 2nd fractional of past year, the U.S. and China besides reached an audit woody that significantly lowered the risk Chinese companies would person to delist from U.S. banal exchanges.

Some of the U.S.-listed Chinese stocks with the largest U.S. organization capitalist ownership connected a percent ground included KFC relation Yum China, livestreaming institution Joyy and pharmaceutical institution Zai Lab, according to a Jan. 25 Morgan Stanley report.

Semiconductor manufacture institution Daqo New Energy had astir 27% U.S. organization ownership, Morgan Stanley said.

The information showed Alibaba had the astir U.S. organization ownership by dollar value, but it lone accounted for 8.2% of the stock.

In a abstracted study Monday, Morgan Stanley equity strategist Laura Wang pointed retired the Biden medication has focused connected targeting tech with ties to the Chinese military.

She noted signs of stabilization successful the U.S.-China relationship, including U.S. Secretary of State Antony Blinken's planned sojourn to Beijing successful the coming days and the imaginable for Chinese President Xi Jinping to sojourn the U.S. during the Asia-Pacific Economic Cooperation Leaders' Summit — acceptable to beryllium held successful San Francisco successful November.

The White House and China's Ministry of Foreign Affairs did not instantly respond to a petition for remark connected the Politico report.

— CNBC's Michael Bloom contributed to this report.