The dimensions of the conflict broadened this month when President Trump moved to prevent a federal retirement fund from investing billions of dollars in shares of Chinese companies. Days later, the Senate unanimously passed a bill that would require Chinese firms listed on U.S. stock exchanges to provide transparency about their finances and ownership to auditors. The measure, if signed into law, could force scores of Chinese firms to delist from the New York Stock Exchange and the Nasdaq.
After squeezing the flow of trade, technology and visas, U.S. moves to choke off capital could present the biggest challenge of all for a Chinese economy that, despite its size, remains highly dependent on an international financial system dominated by the United States. And in China, an increasingly urgent debate is unfolding about whether — and how — the country could weather that pressure.
In recent months, former finance minister Lou Jiwei and prominent Chinese advisers have warned about the inevitability of Washington escalating its tactics from tariffs and technology restrictions to all-out “financial war.”