WASHINGTON: President Donald Trump’s administration is considering the possibility of delisting Chinese companies from US stock exchanges, a source briefed on the matter said on Friday, in what would be a radical escalation of trade tensions between the two countries.

The move would be part of a broader effort to limit US investments into China, the source said, confirming an earlier report by Bloomberg that sent shockwaves through financial markets.

Shares of Alibaba Group Holding, JD.com, Pinduoduo, Baidu, Vipshop Holdings, Baozun and IQIYI fell between 2 per cent to 4pc in afternoon trading.

China’s yuan currency, traded in off shore markets, fell by 0.4pc against the dollar after the news to trade near its weakest against the greenback in about three weeks. Exact mechanisms for how to delist the companies were yet to be worked out and any plan is subject to approval by President Donald Trump, who has given the green light to the discussion, Bloomberg reported, citing a person close to the deliberations.

Officials are also examining how the US could put limits on the Chinese companies included in stock indexes managed by US firms, although it was not clear how that would be done, the agency cited three sources as saying.

A bipartisan group of US lawmakers in June introduced a bill to force Chinese companies listed on American stock exchanges to submit to regulatory oversight, including providing access to audits or face delisting.

Published in Dawn, September 28th, 2019