China’s largest chip foundry, Semiconductor Manufacturing International Corp, dropped 6.2% in overnight trading in Hong Kong, after news media reported that Washington might impose tighter controls on US exports of chip-making equipment to the world’s fifth-largest chip fabricator. The Hong Kong China Enterprises Index followed SMIC down, despite a modest rally among the stronger China property names.

The Biden administration’s China chip conundrum
While anticipation that the US would step up sanctions moved the market, weighty factors favor going easy