The Trump administration is considering ways to limit U.S. portfolio investments in China and contemplating delisting Chinese firms from U.S. stock exchanges, potentially affecting billions of dollars in investments pegged to major indexes, multiple media outlets reported.
The discussion is still in the early stages, with nothing decided and no time frame for implementation, CNBC reported, citing a source familiar with the matter. The discussion includes the option of blocking all U.S. investment in Chinese companies in an effort to protect U.S. investors from excessive risk due to lack of regulatory supervision, the source reportedly said.
Trump administration officials are discussing various ways to restrict U.S. investors' portfolio flows into China, including delisting Chinese companies from U.S. stock exchanges and limiting the exposure of U.S. government pension funds to the Chinese market, Bloomberg News reported.
Markets have been spooked by news of the discussion, which was reportedly green-lighted by President Donald Trump. Shares of Alibaba Group Holding Ltd., JD.com Inc., Pinduoduo Inc., Baidu Inc., Vipshop Holdings Ltd., Baozun Inc. and iQIYI Inc. fell between 2% and 4% in Sept. 27 afternoon trading, Reuters reported.
The U.S. is reportedly looking for additional levers of influence in trade talks as officials from the U.S. and China are set to hold face-to-face negotiations Oct. 10 and 11 in Washington, D.C.
