Beneath the shadows of troubled tech ties and rising US debt, China stocks tumble to unprecedented depths.

China’s CSI 300 Index and Hong Kong’s Hang Seng Index both fell due to a widening trade dispute between the US and China, as well as concerns over US debt ceiling negotiations. By midday, China’s CSI 300 Index had slipped 0.46%, while the Shanghai Composite Index declined 0.66%. In Hong Kong, the Hang Seng Index lost 2.07% while the Hang Seng China Enterprises Index slumped 2.27%, with tech stocks such as Tencent and Meituan leading the decline. Japan’s announcement of plans to tighten controls on semiconductor exports to China added to the gloom. Both Chinese and Hong Kong markets have been under pressure due to evidence of weakness in China’s economy, with April data showing that the Asian giant was already past its post-pandemic boost. The offshore yuan also slipped to 7.0827 per dollar, the first time since December 2022. David Chao, global market strategist Asia Pacific at Invesco, said that with no concrete progress on the debt ceiling, markets are likely to fret even more.

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