A string of Chinese stocks fell tight on Thursday after the arrest of Huawei’s chief economist Meng Wanzhou in Vancouver deepened concerns about trade tensions between the US and China.
Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong was 2.76 percent at 12:40. On mainland side, the CSI 300 Index for the 300 largest shares in Shanghai and Shenzhen fell 2.1 percent. The US stock market is closed Wednesday to commemorate the former US President George H.W. Bush.
The crash arrived after Canadian officials detained Meng, daughter of Huawei founder and CEO Ren Zhengfei, with suspicions that Huawei has violated US sanctions against Iran. Meng faces extradition to the United States.
Huawei’s main knight ZTE nosedived nearly 6 percent in Hong Kong at noon. Meng’s news also met the suppliers of Huawei employees across the Asian stock markets. Among the worst performers is Shennan Circuit, which released nearly 10 percent in Shenzhen after this writing.
Huawei and its leading rival ZTE have been the target of the US government concerned about the alleged links between telecom equipment manufacturers and the Chinese government. The United States ban on ZTE sparks is that Huawei will face a similar fate. In April, the US Department of Commerce announced a seven-year ban which would limit US component manufacturers to sell to ZTE, who in 2017 charged themselves with breaching sanctions against Iran and North Korea.
Chinese stocks had been on a downward trend before Meng’s arrest as a result of rising US rates in recent months. In October, the reference index for Shanghai fell to a four-year low.
Updated with charts of HSCEI and ZTE.