BABA stock and other major Chinese stocks are down today amid reports that the White House is considering ways to limit US investment in China.
Trump Administration Considering Options to Limit US Investment in China
Bloomberg reported earlier today that the Trump administration is considering various options to limit US investment in China, which include delisting Chinese companies from US exchanges and preventing US government pension funds from investing in China. CNBC furthered these reports by adding that the White House could place a ban on all US financial investments in China. Alibaba Group (NYSE:BABA), the major Chinese e-commerce firm headed by Jack Ma, would feel the effects of such measures more than most as seen by BABA stock dropping today.
A delisting of Chinese companies would impact over a trillion dollars worth of investment on major exchanges, and Nasdaq responded to the reports by saying “One critical quality of our capital markets is that we provide non-discriminatory and fair access to all eligible companies. The statutory obligation of all U.S. equity exchanges to do so creates a vibrant market that provides diverse investment opportunities for U.S. investors.” While BABA stock trades on the NYSE, it has still had quite a rocky year as a result of the trade war waging on.
Trade Talks Resume Next Month
BABA stock will be hoping for a reprieve when trade talks between the US and Chinese representatives resume on October 10 in Washington. Chinese Vice Premier Liu He will be part of the Beijing delegation, which could be good news for Chinese stocks. He previously attended talks in the spring as a ‘special envoy,’ which gave him special powers to negotiate on behalf of President Xi Jinping. However, he was stripped of this title by hardliners in the Chinese communist party who believe he made too many concessions to the US.
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BABA Stock Took a Hit Last Week
BABA stock took a hit last week after the company’s founder Jack Ma said it can no longer fulfill its promise to create one million jobs in the US due to the restrictions of the trade war. Ma met with President Trump in January 2017, where he discussed how adding small and medium-sized enterprises to Alibaba’s portfolio could offer a major employment boost in the US. BABA shares are currently valued at $165.42.
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