Chinese Tech Stocks Volatile as U.S. Tightens Investment Restrictions

President Trump's directive on limiting Chinese investments impacts markets, while mainland investors bolster Hong Kong tech shares.

The U.S. has announced new measures to restrict Chinese investments in key sectors such as technology, healthcare, and critical infrastructure, intensifying geopolitical tensions.
Hong Kong's Hang Seng Tech Index initially fell sharply but recovered some losses as mainland investors poured over $1 billion into the market, focusing on AI and tech self-sufficiency.
Alibaba's U.S. shares dropped 10%, reflecting global investor concerns, while its Hong Kong shares saw smaller losses, highlighting divergent market reactions.
Mainland China investors have significantly increased their investments in Hong Kong stocks this year, with net purchases reaching $28.74 billion year-to-date.
Healthcare and tech sectors were among the hardest hit by the new U.S. directive, though some sectors, like real estate, showed resilience in the Chinese markets.