United States President Donald Trump has floated the idea of delisting Chinese companies from its stock exchange. The United States has been involved in a trade war with China. The move could be a defining moment in the relationship between the two countries.
According to a report in Reuters, a source said that it could be because of the rising concerns of the Trump Administration about the activities of the companies. Chinese firms have been accused of not allowing any oversight on their activities.
Following the speculation about the news, many stock indices saw a fall in their numbers. It is still not clear how the delisting would work.
US lawmakers in June had introduced a bill bringing the Chinese companies listed in the US stock market under regulatory oversight, which includes audits. China has been concerned about allowing overseas auditors to investigate the firms citing national security concerns.
According to a report in Reuters, Senator Marco Rubio had said, ” Beijing should no longer be allowed to shield U.S.-listed Chinese companies from complying with American laws and regulations for financial transparency and accountability.”
During his speech in the UNGA President Trump had called out China for theft of intellectual property and product dumping. This was after it had blamed the World Trade Organization for the failure to ensure that China would liberalize its market.
This has led the global markets to be in a state of worry. If the delisting takes place a major plunge in the stock market would be expected. It would be a move to exert more pressure on China to create an environment for a deal which could benefit his administration.
(Inputs from agencies)