Should ETF Investors Be Worried about the Delisting of Chinese Equities?
By Liqian Ren, Director of Modern Alpha, WisdomTree
On December 2, 2020, the House of Representatives voted to pass the Holding Foreign Companies Accountable Act, which passed the Senate in May. President Trump is expected to sign it into law.
Back in August, I broke down six reasons why I believe the impact of Chinese equities delisting is insignificant and secondary to the fundamental earnings factors that drive the performance of Chinese equities. The risk to Chinese equities from delisting particularly the non-state-owned segment is minimal.
The competitive landscape between of the U.S. and China still exists. The U.S.’s market efficiency, work ethic, freedom of speech and well-tested legal system is still a formidable advantage and attraction to foreign companies. But whether, and how, this issue is resolved is a good signal to watch regarding U.S.-China economic dynamics over the next four ye