HONG KONG: Concerns about the worsening Huawei row and the broader China-US trade war put pressure on Asia equities on Tuesday, with analysts warning the crisis could rumble on for some time.
Regional investors were spooked by a sharp drop in New York’s tech-rich Nasdaq after Google said it was beginning to sever ties with the Chinese telecoms giant, days after Donald Trump’s decision to bar it from the US market and put it on a sales blacklist.
The development — with the US citing national security concerns — has muddied the waters in the tariffs stand-off between Washington and Beijing, which was thought to have been close to conclusion at the start of the month.
And now some observers are warning that stalled talks between the economic superpowers might not see any progress before a hoped-for meeting between Trump and China’s Xi Jinping at the G20 in June.
“The market was a little optimistic that a trade deal would just get done here this month,” Brett Ewing, chief market strategist at First Franklin Financial Services, told Bloomberg News.
Dealers have “definitely come to terms with a longer term trade negotiation process”.
While the Commerce Department issued a 90-day reprieve on the ban on dealing with Huawei, saying breathing space was needed to avoid huge disruption, the two appear to be digging their heels in.
And on Monday China’s envoy to the European Union called the Huawei move “wrong behaviour”, adding “there will be a necessary response”.
Zhang Ming warned: “Chinese companies’ legitimate rights and interests are being undermined, so the Chinese government will not sit idly by.”
Regional tech firms were a mixed bag, with Hong Kong market heavyweight Tencent down 1.3 percent but Lenovo and AAC technologies well up. Sony and Sharp were around four percent down in Tokyo and Taiwan Semiconductor gave up almost two percent in Taipei but
Seoul-traded Samsung rose more than three percent.

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