Capital Controls
Since the deliberations first became public, administration efforts around delisting Chinese companies have been put on hold for now, the people said. A Treasury Department spokeswoman said Sept. 28 that option was not being contemplated “at this time.’’ She didn’t address any of the other possibilities being examined and declined to offer any further details.
Kudlow on Monday also told reporters delisting plans were “not on the table.”
While the value of the pension fund and the money it would funnel into China’s market next year is relatively small compared with the overall market and the value of Chinese companies listed on U.S. exchanges, the action has symbolic importance and could be interpreted as the first step in the U.S. government moving toward capital controls.
It’s also a domestic winner for the White House, which would be able to claim that it stopped American armed forces and government workers’ dollars from funding the rise of Chinese companies that Washington alleges have stolen intellectual property from U.S. firms to advance their technological lead over America. That fight is at the heart of Trump’s trade war with Beijing.
Some Trump officials are still pushing for limits on the Chinese companies included in stock indexes managed by U.S. firms, though it’s still an open question how that goal could be achieved. The hard-line advisers are concerned about indexes loading up on Chinese shares of companies that are subject to U.S. sanctions and therefore prohibited from doing business with the government. Those advisers consider it troubling that Americans aren’t made aware of that material risk, people briefed on the talks said.
This article provided by Bloomberg News.