Threat of delisting: Chinese companies under new pressure on American stock exchanges.

US Treasury Secretary Scott Banсent is ready to consider the possibility of delisting Chinese companies from American stock exchanges. This creates even more tension in the already complicated relations between the US and China, exacerbated by tariffs introduced in the trade war.

China must not react, but sit at the negotiating table

Secretary Banсent stated that the decision to delist Chinese companies remains with President Trump.

Chinese firms listed on American stock exchanges have long been under the threat of delisting. The issue arose in 2020 when the US passed the Foreign Companies Accountability Act, requiring access to audit documents of Chinese companies for American regulators. In 2022, over a hundred Chinese companies, including Alibaba, JD.com, and Pinduoduo, were placed on the delisting list.

There are 385 Chinese companies on American stock exchanges with a total market capitalization of over $900 billion. The top 50 companies account for 95% of this figure.

Goldman Sachs economists predict that the prices of Chinese American depository receipts may decline by 9%, and the MSCI China index by 4% in the event of delisting. In the case of a complete severance of financial ties between the US and China, American investors could sell shares of Chinese companies worth up to $800 billion.

Despite the political tension, the market continues to show interest in Chinese companies. For example, Chinese company Chagee raised $411 million during its debut on the American stock market, increasing its share price by 15% on the first trading day.

Most Chinese companies mitigated the threat of delisting by conducting secondary listings or choosing the Hong Kong Stock Exchange as their primary trading venue.

Differences in policy between the US and China may lead to a break in the capital cycle and limit investments in Chinese companies.

Experts predict that the issues surrounding Chinese stocks will persist for a long Time, impacting both companies and stock markets in both countries.