New front in U.S. trade war
September 30, 2019 - The Trump administration is considering a radical escalation of its trade war by blocking Chinese companies -- including at least 11 state-owned firms -- from listing shares on U.S. stock exchanges.
The move would be part of a broader effort to limit U.S. investments into China, according to a report by Bloomberg that sent shockwaves through financial markets.
Details of how to delist companies are yet to be worked out and plans are subject to approval by President Donald Trump, Bloomberg reported citing a person close to the deliberations.
In June Republicans and Democrats in the Senate and the House introduced legislation to force Chinese companies listed on American stock exchanges to submit to regulatory oversight, including providing access to audits or face delisting.
As of February, there were 156 Chinese companies, including at least 11 state-owned firms, listed on the NASDAQ and New York Stock Exchanges, with a total market capitalization of $1.2 trillion, according to the U.S.-China Economic and Security Review Commission.
Forcing Chinese firms to relist in Hong Kong and China would pose strains for the onshore financial system. In June, China launched a new Nasdaq-style market, the so-called “Star Market” in Shanghai, to encourage tech companies to list at home rather than in the U.S. or Hong Kong.
- New Front in Trade War Means No Reprieve for Emerging Markets (Bloomberg)
- Chinese companies listed on major U.S. stock exchanges (U.S.-China Economic and Security Review Commission)
- Trump considering delisting Chinese companies from U.S. stock exchanges (Reuters)
- U.S.-China Trade War (Peterson Institute for International Economics)
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