Hong Kong Stocks fall over fears US-China trade war escalation

Hong Kong share market closed mixed on Wednesday, 22 May 2019, as risk sentiments subdued amid fears of trade tension escalation between the U.S. and China grow after reports that the Trump administration is considering blacklisting Hikvison - a major Chinese surveillance technology firm. At closing bell, the Hang Seng Index inclined 0.13%, or 35.03 points, to 27,692.27. The Hang Seng China Enterprises Index was down 0.28%, or 25.59 points, to 10,605.03.

The U.S. administration is considering limits to Chinese video surveillance firm Hikvision's ability to buy U.S. technology, the New York Times reported on Tuesday, in a move that deepens worries about trade frictions between the world's two top economies. That came after the U.S. Commerce Department blocked Huawei Technologies Co Ltd from buying U.S. goods last week. Shares in state-owned Hikvision plummeted as much as 10% to their lowest since Jan. 4, 2018 after the report.

 

Beijing is ready to resume trade talks with Washington, China's ambassador to the United States Cui Tiankai said, as a top U.S. business lobby in China said nearly half its members are seeing non-tariff barrier retaliation in China due to the trade war.

Investors worried that the lack of progress in talks between the United States and China could signal a protracted trade war. President Xi Jinping called for a new Long March in a speech at Jiangxi, where Mao Zedong began his ascent to power during a series of retreats by the Red Army to evade pursuing Nationalist forces, as per reports. Investors took it as a sign that China is preparing for a protracted trade war, with no clear path to a trade deal in the near future.

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