Delisting of Chinese companies remains just a rumor

A spokesman for the US Treasury said there were currently no specific plans to stop Chinese companies from listing on US exchanges. Last Friday, rumors emerged that the Trump Administration was considering ways to curb cash flows to China.

But the Treasury denied a final decision on the proposal, at least at this stage. Some of the largest Chinese companies are listed on US exchanges.

Other potential measures to take are limiting US exposures to Chinese markets through government pension funds. However, there are various restrictions on Chinese companies listed on US exchanges. The Treasury has been scrutinizing its capabilities for weeks, but the main pressure appears to be coming from Trump advisers in the White House. Both agencies are concerned about the reaction of the markets, seeking a way of execution that does not scare investors. There is still no clear answer from the Chinese.

Trump has, however, given the green light to look at options, including Friday's one that sent the indexes down. However, more dovish advisers remind him that any move by the United States will have a reciprocal response from China.

Source: Bloomberg Finance L.P.

Graphs: Used with permission of Bloomberg Finance L.P.

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