Hong Kong stocks erased gains amid concerns the US-China tech rivalry will escalate after Beijing called for innovation and self-sufficiency to counter US tech sanctions. A government report showed China’s external trade data remained sluggish this year. The Hang Seng Index dropped 0.3 per cent to 20,534.48 at the close of Tuesday trading, overturning an earlier advance of as much as 2 per cent. The Tech Index slumped 1.3 per cent while the Shanghai Composite Index tumbled 1.1 per cent. China Unicom sank 5.5 per cent to HK$6.03 while China Mobile declined 2.7 per cent to HK$62.25 and China’s biggest chip maker SMIC lost 0.2 per cent to HK$16.68. Hong Kong Exchanges and Clearing slipped 0.7 per cent to HK$337.40 after the group was sued by more investors over the nickel trading chaos in March 2022. Ping An retreated 0.6 per cent to HK$55.50. China’s largest insurer said potential claims tied to the Kimpton Hotel fire in Hong Kong may be about 23 per cent of the US$335 million liability, as it took out reinsurance policies to spread its risk. The stock suffered a 2.4 per cent loss on Monday following the blaze. Capable and qualified private enterprises should strengthen independent innovation and play a greater role in promoting self-reliance in science and technology, President Xi Jinping told delegates at the political conference in Beijing on Monday. The Biden administration last week blocked tech exports to another 28 Chinese companies. “Economic warfare” will almost certainly continue and the risk of significant escalation cannot be ruled out,” Yan Wang, chief China strategist at Montreal-based Alpine Macro, said in a report on Tuesday, singling out the tensions as a possible negative surprise. “The pressure [on China] to up the ante has been rising.” The Hang Seng Index earlier jumped to the highest level since February 20, backed up reports this week showing a robust recovery in Chinese manufacturing and services. However, today’s report showed combined exports in January and February fell 6.8 per cent from a year earlier, while imports shrank 10.2 per cent. Meanwhile, the corporate earnings season will kick into full swing from this week. JD.com weakened 0.5 per cent to HK$186.40 after starting a price war with rivals. The e-commerce platform operator, China Unicom and Hong Kong subway operator MTR Corp are among benchmark members publishing their report cards this week. Elsewhere, Hong Kong jewellery retailer Chow Tai Fook tumbled 6 per cent to HK$14.66 after managing director Chan Sai-Cheong, who is in charge of the company’s mainland business, resigned for personal reasons. Animal-feed producer Boen Group jumped 44 per cent to 13.42 yuan on the first day of trading in Shenzhen. Major Asian markets all advanced. Japan’s Nikkei 225 climbed 0.3 per cent, while South Korea’s Kospi also rose less than 0.1 per cent and Australia’s S&P/ASX 200 gained 0.5 per cent.