Escalating US-China tensions were at the fore on Wednesday, sending Asia-Pacific stocks lower after Washington imposed visa restrictions on Chinese officials connected to mass detention of Uighurs, just days ahead of trade talks between the two countries.
China’s CSI 300 of Shanghai and Shenzhen-listed stocks dropped as much as 0.9 per cent to a five-week low after the US followed its decision on Monday to blacklist Chinese surveillance companies with a move to restrict visas for officials linked to a crackdown in western China.
The onshore renminbi, which is permitted to move 2 per cent either side of a daily mid point set by the Peoples’ Bank of China, touched its weakest level against the dollar in more than a month.
“While the US may insist that the two issues, trade, and human rights are separate issues, and indeed it is hard to argue against such a view, timing is everything,” Robert Carnell, an economist with ING said. “The latest developments cannot be reconciled as helping the prospects of a trade deal – no matter how limited in scope.”
The announcement came days before Li He, China’s vice premier and a delegation of high-ranking officials are set to begin the next round of trade talks in Washington.
Elsewhere in Asia-Pacific, the Hang Seng index dipped 0.2 per cent and Japan’s Topix was down 0.5 per cent.
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