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    Home»World»Trump could blacklist Tencent, Alibaba in dying dies of presidency

    Trump could blacklist Tencent, Alibaba in dying dies of presidency

    World By Agency Staff7 January 2021
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    Donald Trump

    The Trump administration is considering adding tech giants Alibaba and Tencent to a blacklist of firms allegedly owned or controlled by the Chinese military, two people familiar with the matter said.

    Targeting Asia’s two most valuable companies, worth a combined US$1.3-trillion, would be US President Donald Trump’s most dramatic step yet in a recent raft of measures unleashed against Chinese companies as he seeks to cement his hardline policy against Beijing during his final days in office.

    Defence department officials, who oversee the blacklist designations, have not yet finalised plans and are also discussing adding other Chinese firms to the list, the sources said, speaking on condition of anonymity because the deliberations are private.

    Some investors expressed scepticism that Alibaba and Tencent would face long-term restrictions

    Both companies declined to comment. The discussions were first reported by the Wall Street Journal.

    Shares in Alibaba, China’s biggest e-commerce firm, and Tencent, a gaming and social media behemoth, were down roughly 4% in afternoon trade on the Hong Kong Stock Exchange. Alibaba’s US-listed shares closed down just over 5% on the news on Wednesday.

    Some investors expressed scepticism, however, that Alibaba and Tencent would face long-term restrictions — given that they are worth a combined $1.3 trillion, widely held by US investors and the likely reputational and financial hit to US stock markets.

    ‘Very bad policy’

    “It’s a very bad policy and there’s enough money in Asia, lots and getting bigger, that one shouldn’t force these companies out of America,” said Thomas Caldwell, chairman of Caldwell Investment Management in Toronto and an investor in the New York Stock Exchange. “Money and markets should be neutral.”

    Trump escalated measures against Chinese firms in November with an executive order that bans US investors from buying shares of Chinese firms.

    On Tuesday, he ordered a ban on transactions with eight Chinese software applications, including Ant Group’s Alipay mobile payment app and Tencent’s QQ Wallet and WeChat Pay.

    Alibaba Group head office in Beijing. Thomas Peter/Reuters

    The November executive order sought to give teeth to a 1999 law that tasked the defence department with drafting a list of Chinese companies deemed to be owned or controlled by the Chinese military.

    The Pentagon has so far blacklisted 35 firms, including China’s top chipmaker SMIC and oil giant CNOOC.

    The Trump administration has had both Tencent and Alibaba’s financial technology affiliate Ant Group in its crosshairs for some time.

    In August, Trump signed an executive order to ban some US transactions with Tencent’s WeChat. But the restrictions were blocked by courts mainly on freedom of speech grounds.

    Alibaba’s market value has shrunk by more than a quarter since November after the Ant Group IPO failed

    Reuters reported in November that the US state department had submitted a proposal to add Ant Group to another trade blacklist to deter US investors from taking part in its now-aborted initial public offering. But the commerce department, which oversees the blacklist, shelved the proposal after Alibaba president Michael Evans urged commerce secretary Wilbur Ross to reject the proposal.

    Ant Group’s $37-billion IPO was halted after co-founder Jack Ma publicly criticised China’s regulatory system in October, setting off a concerted regulatory crackdown in the country on Alibaba and Ant.

    Alibaba’s market value has shrunk by more than a quarter since November after the Ant Group IPO failed. But valued at more than $600-billion, it is still among the biggest 10 companies globally.  — Reported by Andrea Shalal, Alexandra Alper, Ross Kerber, John McCrank, Josh Horwitz, Sam Shen, Pei Li, Munsif Vengattil, Kanishka Singh and Bhargav Acharya in Bengaluru, (c) 2020 Reuters

    Alibaba Ant Group Donald Trump Jack Ma Tencent top
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