If you hold U.S.-listed Chinese stocks like Alibaba Group Holding Ltd. (NASDAQ:BABA), JD.com Inc. (NASDAQ:JD) or PDD Holdings Inc. (NASDAQ:PDD), you may soon face serious liquidity risks, as delisting threats tied to geopolitical and regulatory frictions between Washington and Beijing mount with fresh urgency.
In a note shared Thursday, Goldman Sachs analyst Kinger Lau, CFA, said delisting fears for Chinese American Depositary Receipts (ADRs) are rising again, driven by escalating trade tensions and new policy guidance from U.S. officials, including President Donald Trump‘s America First Investment Policy and Treasury Secretary Scott Bessent’s statement that “everything is on the table” in the response to China’s retaliatory tariffs.
According to Goldman Sachs’ ADR Delisting Barometer, there is currently a 66% probability of delisting risk embedded in Chinese ADRs. A full pricing in of delisting risk could lead to a 9% drop in ADR valuations from current levels.
“U.S. listings by Chinese companies is widely regarded as an embodiment of financial market relations and a leverage for the potential negotiation between the two nations,” Lau wrote.
How High Are The Stakes?
“We estimate that U.S. institutional investors currently own around U.S.$830 billion of Chinese stocks across A shares, H shares and ADRs,” Goldman Sachs stated. Of this, approximately $250 billion is tied up in ADRs specifically.
At the same time, Chinese investors could be forced to …Full story available on Benzinga.com
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