After the United States launched its tariff threat, China retaliated, bringing U.S.-China trade into a phase of mutual strategic maneuvering. In response, U.S. Treasury Secretary Scott Benssent recently stated in an interview that China should not take retaliatory actions, but instead should “come to the table”. At the same time, he also warned of the possibility of delisting Chinese companies from U.S. stock exchanges, adding that President Trump would make the final decision. As a result, the issue of delisting Chinese companies from U.S. exchanges has been reintegrated into the broader context of U.S.-China competition. This suggests that the scope of such competition may extend beyond bilateral trade to include financial sectors, accelerating the process of comprehensive decoupling between the two nations. The mention of the issue of Chinese concept stocks introduces more uncertainty regarding their future.

In fact, Chinese concept stocks have previously faced the risk of delisting due to disputes over audit sovereignty. At the end of 2020, the U.S. passed the Holding Foreign Companies Accountable Act (HFCAA), which gave China three years to grant the U.S. Securities and Exchange Commission (SEC) the access it demanded for auditing purposes. Failure to comply could lead to the delisting of more than 200 companies listed in the U.S. Following this, the SEC issued multiple warnings regarding Chinese concept stocks. In 2022, the SEC placed over a hundred Chinese stocks listed in the U.S. on a "proposed delisting" list, including major companies like Alibaba, JD.com, and Pinduoduo. Subsequently, Chinese state-owned enterprises listed in the U.S. were delisted by the end of 2022 due to data security concerns and their refusal to provide audit working papers to U.S. regulators. Meanwhile, many Chinese concept stocks managed to maintain their U.S. listing status after both China and the U.S. reached agreements on audit issues. This round of delisting concerns came to an end with the successful resolution of the audit dispute. Following this, the valuations of Chinese concept stocks rebounded along with the rise of U.S. stocks, and some Chinese companies continued to list on the U.S. markets. Data shows that since 2024, a total of 88 Chinese concept stocks have been listed in the U.S., raising nearly USD 4.4 billion in capital. As of April 9, 2025, 27 Chinese concept stocks have been listed in the U.S., a 93% increase compared to the same period last year. However, their total fundraising amounted to only USD 340 million, an 80% decrease compared to the previous year. Even as U.S. Treasury Secretary Bessent raised the issue of Chinese concept stocks again, on April 17, the Chinese tea drink company Chagee made its debut on the U.S. stock market. Its IPO raised USD 411 million, and its stock price rose by 15% on the first day, bringing its market value to about USD 6 billion. The listing of Chagee was one of the few large Chinese concept stock IPOs in recent years, signaling that, from a market perspective, these stocks are still recognized by U.S. investors. Therefore, the current threats to Chinese concept stocks are mainly coming from the political sphere.

Similar to the threat of tariff hikes, the Trump administration's threat to Chinese concept stocks was also a tool of its "conservative" policies, aimed at achieving the goal of "Making America Great Again". In this sense, the competition between the U.S. and China is comprehensive, extending beyond just the bilateral trade arena. As such, the uncertainty surrounding Chinese concept stocks will be a long-term issue. After pushing for a "trade decoupling" between China and the U.S., the U.S. is likely to pursue further "financial decoupling". On one hand, the U.S. may use tools such as delisting Chinese concept stocks, citing national security concerns, in conjunction with trade issues, to apply pressure on China. By severing the dual circulation of trade and capital between the two nations, the U.S. aims to encourage the return of American businesses and investments, which is essentially a core political strategy of Trump. On the other hand, the legal risks associated with the Variable Interest Entity (VIE) structure, which has long troubled Chinese concept stocks, remain unresolved. This long-standing risk, particularly amid ongoing geopolitical tensions between the U.S. and China, is likely to intensify once again. For the more than 180 Chinese concept stocks that operate under the VIE structure, this poses significant uncertainty.

In fact, after the U.S.-China audit dispute subsided, researchers at ANBOUND noted that, within the broader context of U.S.-China competition, the long-term uncertainty faced by Chinese concept stocks would continue to lead to further differentiation and consolidation of these companies. Large Chinese concept stocks are likely to return to the Chinese market, including Hong Kong’s stock market. Under market pressure, most Chinese concept stocks with less promising development prospects will likely fall into the category of "zombie stocks" as market fluctuations take their toll. In 2022, amid the audit dispute, state-owned enterprises such as PetroChina and Sinopec voluntarily delisted from the U.S. stock market. These large state-owned enterprises were primarily listed in A-shares or Hong Kong stocks, so their delisting from U.S. markets did not significantly impact their operations. This also explains why some large Chinese concept stocks have gradually "returned" in recent years, achieving multiple listings to mitigate the delisting risk. The delisting of Chinese concept stocks does not directly impact a company’s operations. The primary consequence is the narrowing of investment channels, which constrains the company’s development. This kind of differentiation is expected to intensify in the future.

At the same time, the greater loss lies in the valuation losses suffered by investors in Chinese concept stocks. According to a report by Goldman Sachs, about 7% of the market value of U.S.-listed Chinese American Depositary Receipts (ADRs) is currently held by U.S. institutional investors who are not eligible to trade on the Hong Kong market. As a result, if Chinese concept stocks are delisted from U.S. exchanges, these investors would be forced to sell off their holdings prematurely. Goldman Sachs estimates that in the event of a forced delisting, valuations of both U.S.-listed Chinese ADRs and the MSCI China Index could drop by approximately 9% and 4%, respectively, from current levels. In a more extreme scenario of full financial decoupling between the world’s two largest economies, Goldman projects that U.S. investors could be forced to divest as much as USD 800 billion worth of Chinese equities.

For Chinese concept stock companies, in the face of ongoing uncertainty, the most practical choice remains pursuing a "homecoming" strategy to eliminate the risk of delisting. Hong Kong’s Financial Secretary Paul Chan Mo-po recently stated that he has instructed the Securities and Futures Commission (SFC) and the Hong Kong Stock Exchange (HKEX) to be fully prepared: if U.S.-listed Chinese companies wish to return, Hong Kong must be positioned as their primary listing destination. According to LiveReport big data, there are currently 385 Chinese companies listed on U.S. exchanges, including the NYSE, NASDAQ, and AMEX, with a combined market capitalization of over USD 900 billion. Notably, the top 50 companies, including Alibaba and Pinduoduo, account for 95% of the total market value. While the remaining companies are more numerous, their market caps are relatively small. As of now, many major Chinese concept stocks, such as Alibaba, NetEase, and JD.com, have already pursued secondary listings or dual primary listings in Hong Kong. Among the Chinese concept stocks that are still exclusively listed in the U.S., only a few remain, such as Pinduoduo, Amer Sports, Futu Holdings, Full Truck Alliance, and Vipshop. Even among these, some are already making plans to list in Hong Kong. This clearly shows that Hong Kong has become a key landing spot for Chinese companies preparing for a potential delisting from U.S. markets.

According to research by Huatai Securities, among 53 U.S.-listed Chinese ADRs with market capitalizations over USD 1 billion, 76% by market value have already completed either dual primary listings (47%) or secondary listings (29%) on the Hong Kong Stock Exchange. Among these larger companies, 75% by number of those still solely listed in the U.S. meet the requirements for either dual primary or secondary listings in Hong Kong. Considering where the companies are listed in Hong Kong without raising new capital or issuing new shares, the return of some of these companies to Hong Kong is unlikely to place significant strain on the market’s liquidity. According to the latest HKEX listing requirements, Goldman Sachs estimates that 27 Chinese concept stocks, with a combined market capitalization of RMB 1.35 trillion , about USD 184 billion USD, may be eligible for either dual primary or secondary listings in Hong Kong. This means that if the U.S. were to move forward with a forced delisting of Chinese ADRs, the vast majority of these companies by market value would be able to continue trading through listings in Hong Kong, preserving both their market presence and investor access.

Although Hong Kong stocks are still not comparable to U.S. stocks in terms of market capacity and liquidity, they are already the best choice for Chinese concept stocks. Of course, a large number of small and medium-sized companies do not meet the listing requirements of Hong Kong stocks and A-shares, and there are not many alternatives. Most of them have to withdraw from the market and face the different outcomes of being cleared out. As it stands, the actual growth and value of these companies are limited.

Although the market impact is limited, from the perspective of geopolitical competition, the delisting of Chinese concept stocks means that the capital cycle between the U.S. and China has been broken. It not only cuts off the path for Chinese companies to go public in the U.S. for financing, but also restricts American capital investment in China, especially American private equity funds' investment in Chinese science and technology companies. On the one hand, after the listing channel is interrupted, American capital will avoid investing in Chinese companies, especially start-ups, and promote the decoupling of capital from China; on the other hand, some hedge funds and other speculative capital will short the Chinese market and Chinese concept stocks, thereby affecting the valuation of Chinese assets.

Final analysis conclusion:

The renewed focus on the issue of Chinese concept stocks, like the trade dispute, is part of the U.S.’s broader policy of competition with China. This means that the risk of Chinese concept stock delisting, under the larger backdrop of U.S.-China competition, is a long-term uncertainty. Although in the short term the impact on companies may be limited, it has long-term implications for both Chinese concept stock companies and the capital markets of China and the U.S. In particular, it severs the capital circulation between the two countries, affecting not only long-term investment but also leading to a revaluation of Chinese assets.