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Illustration: Eniola Odetunde/Axios

Tech stocks rebounded slightly in China after Wednesday’s selloff that had been prompted by new antitrust rules proposed by Chinese regulators.

Why it matters: The regulations could limit the power of China’s biggest tech companies. By the FT’s math, the country’s tech sector lost $290 billion in value in the space of two days.

  • The Hong Kong-listed companies that took the biggest hit are Alibaba, JD.com, Xiaomi, Tencent, and Meituan.
  • The Hang Seng Tech Index — comprised of the 30 top technology companies listed in Hong Kong — rose 3.2%, after falling over twice as much on Wednesday.

What’s at stake: These companies will be “forced to adapt and change, sending compliance costs higher and hurting monetization,” Mark Haefele, the chief investment officer of global wealth management at UBS, wrote in a note on Wednesday.

  • But “competition has already intensified in recent years, with ‘incumbents’ (e.g., Alibaba, Tencent) losing market share to ‘disruptors’ (e.g. Pinduoduo, ByteDance), so the consequences will likely be less meaningful given reduced dominance across segments compared to a few years ago,” analysts at Morgan Stanley wrote in a note, per CNBC.

The big picture: It’s the second time this month Chinese officials have spooked investors and mucked up understanding about how tech companies will be able to operate there.

  • Shares of Alibaba were hit last week, after the government halted the colossal Ant IPO listing in Shanghai (then the company pulled the Hong Kong leg, too).

Go deeper

The U.S.-China split in space

Illustration: Aïda Amer/Axios

China and the U.S. don't collaborate in space —a decades-old divide that is shaping the future of both nations' space programs.

Why it matters: U.S. semiconductor companies and those in other sectors are under pressure — from politicians and consumers — to become less reliant on China. The record of the nations' parallel ambitions in space shows what the U.S. gains and loses when it cuts China off.

Dan Primack, author of Pro Rata
25 mins ago - Economy & Business

New deals in the COVID economy

Illustration: Sarah Grillo/Axios

COVID-19 is the macro horror of our lifetimes, and has destroyed or severely damaged countless businesses. But, like with most horribles, it also has created some opportunities.

Driving the news: Merck this morning announced an agreement to buy OncoImmune, a Maryland-based biotech that showed promising late-stage clinical results for a therapy that treats severe and critical coronavirus cases.

1 hour ago - Technology

Biden's openings for tech progress

Photo illustration: Eniola Odetunde/Axios. Photo: Win McNamee/Getty Images 

Item No. 1 on President-elect Joe Biden's day-one tech agenda, controlling the flood of misinformation online, offers no fast fixes — but other tech issues facing the new administration hold out opportunities for quick action and concrete progress.

What to watch: Closing the digital divide will be a high priority, as the pandemic has exposed how many Americans still lack reliable in-home internet connections and the devices needed to work and learn remotely.