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ZERO HEDGE: US Launches Soft Capital Control Attack On Beijing, “Urges” Colleges To Sell Chinese Stocks
Article by Tyler Durden in ZeroHedge
One day after Trump activated what Bloomberg described as the “nuclear option” when the US announced that Huawei can’t access US technology directly or indirectly, an action which leaves it in extremely difficult circumstances, the U.S. State Department has escalated the Cold War with China yet again, with Bloomberg reporting that the US is now asking colleges and universities to divest from Chinese holdings in their endowments, “warning schools in a letter Tuesday to get ahead of potentially more onerous measures on holding the shares.”
As Bloomberg explains, “Tuesday’s warning is part of a larger campaign by U.S. officials to slow the money that has flowed from investment funds into Chinese companies. Secretary of State Michael Pompeo told state governors in February that some pension funds are playing into China’s hands.”
“Boards of U.S. university endowments would be prudent to divest from People’s Republic of China firms’ stocks in the likely outcome that enhanced listing standards lead to a wholesale de-listing of PRC firms from U.S. exchanges by the end of next year,” wrote Keith Krach, undersecretary for economic growth, energy and the environment, in the letter addressed to the board of directors of American universities and colleges, and viewed by Bloomberg.
“Holding these stocks also runs the high risks associated with PRC companies having to restate financials,” he said.
The latest broadside against Beijing has seen Trump tightening limits on Chinese university students, ordering new restrictions in June that canceled the U.S. visas of certain graduate students and university researchers; and now he is limiting college exposure to Chinese stocks. Also earlier this month, the US went after two of China’s largest tech companies with executive orders prohibiting U.S. persons and companies from doing business with ByteDance’s TikTok video app and Tencent Holdings’s WeChat messaging service.
As reported previously, US regulators recently urged American stock exchanges to set new rules that could trigger the delisting of Chinese companies, following mounting concerns that investors are being exposed to frauds. To read this article in its entirety click here.
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