U.S.-listed Chinese stocks resumed a steep selloff on Monday as concerns about Beijing’s close relationship with Russia added to losses spurred by its crackdown on tech giants and the growing risk of U.S. delistings.

The Nasdaq Golden Dragon China Index declined 12% to its lowest level since July 2013, adding to last week’s rout. American depositary receipts of e-commerce giant Alibaba Group Holding Ltd. and rival JD.com Inc. dropped at least 10% each, while Pinduoduo Inc. tumbled 21%. Search-engine operator Baidu Inc. fell 8.4%. Alibaba has tumbled more than 30% this year, its lowest level since June 2016.

>> RELATED: U.S. warns Chinese on support for Russia in Ukraine war

The slump followed a report that Russia had asked China for military assistance for its war in Ukraine. Even as China denied the report, traders worried that Beijing’s potential overture toward Vladimir Putin could bring a global backlash against Chinese firms, even sanctions. The U.S. and China will hold their first high-level, in-person talks since the invasion today.

Other negative headlines included Tencent Holdings Ltd. reportedly facing a possible record fine for violations of anti-money-laundering rules, as well as the lockdown of Shenzhen for at least a week after virus cases doubled nationwide.

PANIC SELLING GRIPS CHINESE STOCKS IN BIGGEST PLUNGE SINCE 2008

“There’s horrible, awful sentiment around China,” said Vital Knowledge’s Adam Crisafulli. “De-listing fears and renewed Covid pressures delivered a double-whammy to the few bulls left. There’s wholesale liquidation and even optimists think the space is just too hard right now. Valuations may be cheap and the PBOC is one of the few central banks easing policy, but this isn’t enough.”

Adding to the sentiment, JPMorgan Chase & Co. analysts downgraded Chinese internet stocks to sell-equivalent ratings, including JD.com, Alibaba and Tencent, calling them “uninvestable” in the near-term. “Due to rising geopolitical and macro risks, we believe a large number of global investors are in the process of reducing exposure to the China internet sector, leading to significant fund outflows,” the firm wrote in a March 14 report.

Fund Managers Run Away From China Stocks Even With 75% Discount

In Asian trading Monday, the Hang Seng China Enterprises Index posted its biggest drop since November 2008, while the Hang Sang Tech Index tumbled 11% in its worst decline since the gauge was launched in July 2020. That wiped out $2.1 trillion in value since a year-earlier peak.

“While it is tempting to call for a bottom after such a heavy selloff, we believe the valuation is not low enough to argue everything bad has been priced,” said Leonardo Pellandini, a strategist at Bank Julius Baer.

Last week, the risk of Chinese firms delisting from the U.S., together with added regulatory concerns and the exclusion of a company from a Norwegian sovereign wealth fund, sparked a rout in the Golden Dragon Index, which tracks American depositary receipts of Chinese firms. The gauge fell 18% last week to close at the lowest level since September 2015.

The largest China tech exchange-traded fund in the U.S. has erased all the gains since its debut in 2013. The KraneShares CSI China Internet Fund (KWEB), a $4.9 billion ETF that invests in Chinese tech companies, has slumped over 40% this year, erasing all the gains, including dividend payouts, since it started trading nine years ago.

“The issue right now is the lack of a positive catalyst in China with regulatory noise continuing to create an overhang on ADRs,” said Sharif Farha, a portfolio manager at Safehouse Capital. “In the short term we think overall Chinese equities will continue to face selling pressure. Longer term, the strong will survive and likely get stronger, bigger.”

The investing environment in China is highly uncertain, so diversification is key, according to Jeremy Richardson, senior portfolio manager of global equities at RBC Global Asset Management (UK) Ltd.

“It makes sure that you’re not loading on some of these exogenous, systemic issues where it’s very hard for an individual investor to have the degrees of insight necessary to be able to take that risk and expect to be rewarded for it over time,” he said in an interview Monday.