- Shares in Shanghai plunged nearly 4% overnight after China retaliated by ordering the U.S. to close its consulate in the southwestern city of Chengdu, a day after Washington forced Beijing to leave its mission in Houston, citing alleged spying.
- The Chengdu consular district serves as a key U.S. listening post for developments in Tibet and China's development of strategic weapons in neighboring regions.
- It's the latest flashpoint between the two countries. Secretary of State Michael Pompeo on Thursday cast China's leaders as tyrants bent on global hegemony.
- "If the free world doesn't change Communist China, Communist China will change us," he declared. "There can't be a return to past practices because they're comfortable or because they're convenient."
- "If we bend the knee now, our children's children may be at the mercy of the CCP, whose actions are the primary challenge to the free world," Pompeo added, dubbing modern China a "Frankenstein" following decades of failed Western engagement.
- He also discussed the tech frontier. "We have stopped pretending Huawei is an innocent telecommunications company... we have called it what it is, a national security threat, and taken action accordingly."
- Over in Hong Kong, the Hang Seng index slipped 2.6%, as tech stocks like Tencent (OTCPK:TCEHY) and Alibaba (NYSE:BABA) led losses across the board.
- In the U.S., S&P futures are down 0.8%, after losing 1.2% in the previous session.
- Expect declines in the China ETFs FXI, KWEB, CQQQ, ASHR, MCHI, YINN, TDF, EWH, YANG, KBA, CAF, GXC, CHIQ, CYB, CWEB, and CHIX.
- For more on the recent tensions with China, see Sparks fly as U.S. orders China to close consulate in Houston.
Chinese shares skid 4% amid rising tensions with Washington
iShares China Large-Cap ETF (FXI), KWEB, CQQQ, ASHR, MCHI, YINN, TDF, EWH, YANG, KBA, CAF, GXC, CHIQ, CYB, CWEB, CHIX, TCEHY Stock, BABA StockYoel Minkoff, 120 Comments