Shares in Chinese tech firms and chip makers have fallen, as investors reacted to new US export control measures aimed at slowing China’s military and technological progress.

According to reports by Reuters, the new measures prevent US firms suppling Chinese chipmakers with the tools to produce advanced chips unless they obtain a licence. This will curb China’s ability to expand production or upgrade their equipment.

The new export controls will also limit other technology reliant on chips including data centers, artificial intelligence and military weapons.

Taiwan dominates the global chip market, but Chinese chip foundries supply 70 per cent of the Chinese domestic market.

Retailer Alibaba and technology company Tencent were among the companies whose share prices were affected by the news. An index measuring China's semiconductor firms tumbled nearly seven per cent, and Shanghai's tech-focused board STAR Market declined by around four per cent.

The impact of the news on technology shares outside China was limited as South Korea, Japan and Taiwan were closed for holidays on Monday.

The global chip industry is already under pressure due to falling demand for electronic devices following the pandemic.

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