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Biden’s China comments help nudge Chinese techs stocks into the red

Chinese tech stocks such as Baidu, Weibo and lost ground Wednesday as the sector put in a mixed performance following President Joe Biden’s State of the Union comments about the current relationship between Washington and Beijing.

As trading progressed, Baidu shares were down by 4.5%, while Weibo was off by 2.6% and fell 3%. Losses also came from Pinduoduo, JOYY Inc. and Bilibili.

The KraneShares CSI China Internet ETF fell more than 2%.

Relations between the U.S. and China have been tense for more than a year as Chinese COVID-19 policies involved widespread national lockdowns and massive disruptions to supply chains, especially those involving semiconductors and other leading tech products.

However, a suspected Chinese spy balloon that flew across the U.S. last week ratcheted up tension with Beijing as politicians and pundits criticized Biden for not authorizing the U.S. military to immediately shoot down the balloon. The military didn’t go through with shooting down the balloon until it had flown above the Atlantic Ocean over the weekend.

During his State of the Union address Tuesday night, Biden didn’t mention the balloon incident directly, but still claimed credit for defending Americans against the Chinese incursion.

“If China threatens our sovereignty, we will act to protect our country,” Biden said. “And we did.”

As several Chinese tech stocks declined, Alibaba remained near its breakeven point. Reports arose on Wednesday saying that Alibaba (BABA) is currently testing out an artificial intelligence tool similar to that of OpenAI’s ChatGPT.

The AI trend has garnered a lot of attention this week, as Microsoft held an event to say it is integrating ChatGPT into its Bing search engine. And on Wednesday, Google held its own event to show off updates that include an AI-based “multisearch” feature to its search capabilities. SeekingAlpha

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