Feb 24 (Reuters) - Shares of Chinese companies listed in the United States fell in early trading on Friday as reports that Washington was looking to expand the number of troops helping train Taiwanese forces added to rising Sino-U.S. tensions.
Heavyweights Alibaba , JD.com , Baidu tumbled between 2.9% and 3.9%. In comparison, the Nasdaq (.IXIC) fell 1.5% as broader markets dropped after hot inflation data.
The iShares China Large-Cap ETF slipped 2.9%, while KraneShares CSI China Internet ETF shed 2.8%.
One U.S. official, speaking on condition of anonymity, said the exact number of increased troops was unclear, but the move was unrelated to recent tensions over the shooting down of a Chinese spy balloon which flew across the United States.
"I don't see China as a safe place to invest in at this time because the geopolitical risk is just unknown," said Dennis Dick, a trader at Triple D Trading in Ontario, Canada.
China's blue-chip CSI300 Index (.CSI300) closed 1% lower during Asia hours, while shares of aerospace defense companies jumped.
Relations between the world's two largest economies worsened this month over the shooting down of the Chinese spy balloon, weighing on China ADRs after a sharp rally starting late last year.
The Nasdaq Golden Dragon China index (.HXC) has shed 8.5% so far this month, on track for its first decline in four months after surging about 70% from November to January.
"With the ADRs, you do have an overhang in terms of the delisting concerns from last year and so with the re-emergence (of) political risk, the potential risk factor has gone up a little bit," said Michael Wang, deputy portfolio manager at Mirabaud Asset Management.
A multitude of factors weighed on China ADRs last year including a risk of delisting from U.S. exchanges over an audit dispute, trade friction and geopolitical worries.
Meanwhile, a senior U.S. official said that the United States will likely limit the level of advanced semiconductors made by South Korean companies in China, in an attempt to thwart Beijing's technological ambitions and blocking its military advances.
