Apr 17, 09:48 AM

Goldman Sachs: US-China Decoupling Could Trigger $800 Billion US Selloff, $2.5 Trillion Total Impact

Goldman Sachs Group Inc. has warned that US investors could be compelled to sell approximately $800 billion worth of Chinese equities in the event of an extreme financial decoupling between the United States and China. US institutional investors currently hold about $250 billion in Chinese companies’ American Depositary Receipts (ADRs), representing 26% of the total market value, and $522 billion in Hong Kong-listed stocks, as well as about 0.5% of China’s onshore equities. Combined, these holdings exceed $800 billion. Goldman Sachs analysts also noted that about 7% of the market capitalization of Chinese companies is in ADRs, which may not be able to trade in Hong Kong if delisted from American stock exchanges. Companies potentially affected include Alibaba, JD.com, Pinduoduo, Baidu, and BYD. In a full financial decoupling scenario, Goldman Sachs estimates that the total impact could reach $2.5 trillion, with China potentially liquidating $1.7 trillion in US assets, including Treasuries and equities. China currently holds $800 billion in US Treasuries.

#US #Chinese #United States #China #American Depositary Receipts #Hong Kong #Goldman Sachs #American #Alibaba #Pinduoduo #Baidu #BYD #Treasuries #US Treasuries

Written with ChatGPT (GPT-4).

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