The Financial Times reported Thursday, citing two sources briefed on the preparations, that the U.S. would add eight Chinese corporations to an investment blacklist on Thursday, including drone maker DJI Technology Co Ltd.
The U.S. commerce department is also preparing to place over two dozen Chinese enterprises, some of them involved in biotechnology, on an "entity list," limiting U.S. firms' exports to them, the newspaper reported.
Shares on Wednesday of Chinese firms listed in the U.S. were down to their lowest level since March last year, as investors fear the U.S. would impose additional investment and export bans.
The Nasdaq Golden Dragon Index ended the afternoon down 3.1%, having fallen as high as 6.7% earlier in the session. Alibaba Group Holding and JD.com, both technology giants, fell 3.3% and 5.1%, respectively. BeiGene Ltd. and Zai Lab Ltd. were among those reporting declines of more than 10%.
This adds to the more than $1 trillion in value lost by China's technology stocks since their February peak as a result of Beijing's broad clampdown on everything from digital finance and data security to online games and international listings.
In Hong Kong, Wuxi Biologics Cayman Inc. fell a record 25% before paring losses, while Sino Biopharmaceutical Ltd. fell 5% at the closing. Semiconductor Manufacturing International slumped 6.4% following a report that the U.S. is considering tougher penalties.
The proposal under consideration would also strengthen export restrictions on Shanghai-based SMIC, with the U.S. National Security Council scheduled to meet on Thursday, according to sources familiar with the subject.
Additionally, the report disclosed that the Biden administration will expand its blacklist of entities, some of which are alleged to be participating in China's surveillance of Uyghur minorities.
American investors are prohibited from investing in companies on the list, which has grown to over 60 firms.
A DJI representative declined to comment on the report, but referred Reuters to the company's statement issued a year ago when the U.S. Commerce Department placed it on the "Entity List" for the same reason. This move precluded it from purchasing or utilizing U.S.-made technology or components.
It is unclear why Chinese biotechnology companies will be included on the Commerce Department's list.
"It's an excruciating decline, and unless we get more information, it's difficult for us to take action," Lin Cun, a fund manager at Shenzhen Senrui Investment Co., said.
"For the time being, all we can do is monitor the losses," he added.
