On Monday, China has warned of instability in international markets from any “decoupling” of the United States and China, after sources claim that President Trump’s Administration was considering to delist Chinese firms from American Stock Exchanges.
It would be part of a border effort to limit the US investment in Chinese firms, two sources briefed over the issue, in what would be a total escalation of the US-China trade war.
A third source informed that the delisting idea was prompted by growing security concerns within President Trump’s Administration over the activities of Chinese firms.
On Monday, the White House Trade Advisor Peter Navarro has dismissed the reports as “fake news”.
Mr. Navarro told sources that “the story, which appeared in Bloomberg: I’ve read it far more carefully than it was written,” adding that “over half of it was highly inaccurate or simply flat-out false.”
After a sharp fall on the delisting reports, the shares of US-listed Chinese stocks reversed has directed on Monday. JD.Com Inc., and Alibaba Group Holding Ltd. rose by 2 percent each in early trade tumbles around 5 percent on Friday.
Earlier in the day, stocks in China drop to their lowest in almost a month on the reports, which announced at a crucial time ahead of celebrations to mark 70-years since the founding of the People’s Republic of China.
On Monday, Chinese Foreign Ministry spokesperson Geng Shuang told a daily news briefing that he had noted the reply from the United States Treasury, which said there were no plans to block Chinese firm listings “at this time”.
Mr. Geng continued, “Exerting maximum pressure and even seeking the forced decoupling of China-U.S. relations will harm the interests of Chinese and American companies and people, create turmoil in financial markets, and endanger global trade and economic growth.”
He said, “This does not accord with the interests of the international community.”
Geng Shuang further said he hopes that the United States would take a “constructive attitude” towards resolving differences.
China and America have been locked in an escalating trade war for around 15-months, both have imposed punitive duties on hundreds of billions of dollars of each others’ goods, threatening global growth, and roiling financial markets.
In June, the US Lawmakers from both parties have introduced a bill to force Chinese firms listed on the US Stock Exchanges to submit regulatory oversight, including offering access to audits or face delisting.
Chinese Authorities have been resistant to let overseas regulators inspect local accounting firms – including firms’ members of the Big Four International Accounting Networks – citing national security concerns.
The US and China are due to restart high-level trade discussions next week in Washington.
Ahead of talks, Chinese companies have bought up to 600000-tonnes of the US soybeans for shipment from November to January, informed sources. The purchases form part of a tariff-free quota permitted for up to 2 million tonnes this week. China has often made goodwill purchases of the US agricultural goods before the trade talks next week.
China hopes Washington and Beijing will resolve their trade differences “with a calm and rational attitude”, said Vice Commerce Minister Wang Shouwen, who has been a part of the negotiation team in China.