Beijing’s widening curbs on iPhone use by government staff raised concerns among U.S. lawmakers on Thursday and fanned fears that American tech companies heavily exposed to China could take a hit from rising tensions between the countries.
Apple (AAPL.O) fell more than 3% and was on track for its worst two-day decline since November after news that Beijing has told employees at some central government agencies in recent weeks to stop using their Apple mobiles at work.
Several Wall Street analysts said the curbs show that even a company with a good relationship with the Chinese government and a large presence in the world’s second-largest economy was not immune to rising tensions between the two nations.
Sino-U.S. friction has worsened in recent years as Washington tries to restrict China’s access to key technologies including cutting-edge chip technology, and Beijing looks to reduce its reliance on American tech.
Apple supplier Qualcomm (QCOM.O), one of the U.S. companies with the largest China presence, tumbled nearly 7% to lead losses among major tech firms.
Lawmakers of both major U.S. parties have been vocal in their concerns about national security risks allegedly created by China’s products, pressuring the Biden administration to get even more aggressive with Beijing.
The wider ban is not surprising and shows how China is trying to limit a Western company’s market access to the nation, said U.S. Representative Mike Gallagher, the chairman of the House panel on China.
“This is textbook Chinese Communist Party behavior – promote PRC (People’s Republic of China) national champions in telecommunications, and slowly squeeze Western companies’ market access,” Gallagher, a Republican, told Reuters.
U.S. Senator Mark Warner, a Democrat and the chair of the Senate Intelligence Committee, also shared similar concerns and said, “as the Chinese economy stalls, we can potentially anticipate more aggressive moves against foreign businesses”.
Source : Reuters