The US President, Mr. Donald Trump’s administration is considering delisting Chinese companies from U.S. stock exchanges, three sources briefed on the matter said, in what would be a radical escalation of U.S.-China trade tensions.
The move would be part of a broader effort to limit U.S. investment in Chinese companies, sources said. One said it was motivated by the Trump administration’s growing security concerns about the companies’ activities. Major U.S. stock indexes slipped on the news, which came days before China celebrates the 70th anniversary of the birth of the People’s Republic on Oct. 1, when the world’s No. 2 economy will shut down for a week of festivities.
Shares of Hangzhou, Zhejiang-based Alibaba ended down 5.15%. JD.com fell 5.95% and Baidu Inc declined 3.67%. The iShares China Large-Cap ETF shed 1.15%. Shares of New York Stock Exchange-owner Intercontinental Exchange Inc ended down 1.88% and shares of Nasdaq Inc declined 1.70%. It was not immediately clear how any delisting would work.
In June, U.S. lawmakers from both parties introduced a bill to force Chinese companies listed on American stock exchanges to submit to regulatory oversight, including providing access to audits, or face delisting. Chinese authorities have long been reluctant to let overseas regulators inspect local accounting firms – including member firms of the Big Four international accounting networks – citing national security concerns.
'Beijing should no longer be allowed to shield U.S.-listed Chinese companies from complying with American laws and regulations for financial transparency and accountability,' the Republican Senator, Mr. Marco Rubio said at the time.