The Chinese Foreign Ministry responded to reports that US agencies are moving to remove AI tools built on DeepSeek, stating that China consistently opposes the overgeneralisation of national security concepts and will firmly defend the legitimate interests of Chinese firms. The transmission channel here runs through regulatory and geopolitical risk premia, as restrictions on a Chinese AI model raise the perceived cost of cross-border technology exposure and feed into the broader US-China decoupling narrative. Chinese technology equities, particularly AI-linked names listed in Hong Kong and onshore, along with US-listed Chinese ADRs, are most directly exposed, since any formal federal restriction could compress revenue expectations for firms seeking Western enterprise customers. Hong Kong's Hang Seng Tech and the offshore yuan may also reflect shifts in sentiment toward Chinese assets. Traders should watch for any formal procurement guidance or executive action from US federal agencies defining the scope of the removal, as the precise wording will determine whether the restriction is narrow or extends to broader categories of Chinese AI software.
CHINA FOREIGN MINISTRY, ON US AGENCIES TO REMOVE AI TOOLS WITH DEEPSEEK: CHINA ALWAYS OPPOSES OVERGENERALISING NATIONAL SECURITY CONCEPT; CHINA WILL FIRMLY SAFEGUARD LEGITIMATE INTERESTS OF CHINESE FIRMS
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