Are Chinese Stocks Headed For A Delisting Debacle

President Trump and his team have said they’re keeping their options open when it comes to their trade war with China.

After tariffs, one outrageous tactic would be to delist Chinese stocks from U.S. markets, which, of course, would be a major escalation.

And a crazy Ivan move such as that cannot be ruled out because Trump has been clear that he’s willing to pursue policy goals despite pain for financial markets.

But what happens to Chinese stock if he acts on that capricious whim.

Currently there are 286 Chinese companies listed on major U.S. stock exchanges. Many are smaller, lesser-known firms. But some are huge global names such as these: 

• Tech giant Alibaba Group 

• Baidu, a search engine and internet company

• PDD Holdings, the parent company of e-commerce site Temu

• Tencent Music Entertainment Group 

• JD.com, an e-commerce company

In the event of a delisting attack, there are pretty much only two things investors can do.

They can convert their ADRs into shares listed on the Hong Kong Stock Exchange. But more likely most investors will opt to simply sell their stakes. 

That would send a serious ripple through global markets. Goldman Sachs analysts estimate that U.S. institutional investors currently own just under $1 trillion worth of Chinese stocks.