US lawmakers push to delist Alibaba, Baidu over security risk

Two Republican lawmakers have urged the US Securities and Exchange Commission (SEC) to delist several Chinese companies, including Alibaba Group, due to national security risks.

John Moolenaar and Rick Scott sent a letter to SEC chair Paul Atkins, requesting action against 25 Chinese firms listed on US exchanges.

They cited alleged ties to the Chinese military and support for the Chinese Communist Party.

The companies mentioned include Baidu, JD.com, and Weibo.

The lawmakers said these firms, though appearing commercial, serve state purposes and pose risks to US investors.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ The trillion-dollar financial impact of potential Chinese delistings

This latest push to delist Chinese companies represents a dramatic escalation with massive financial implications far beyond the targeted firms.

U.S. institutional investors currently hold approximately $830 billion in Chinese equities that could be subject to forced liquidation if widespread delisting occurs 1.

Goldman Sachs estimates that extreme U.S.-China financial decoupling could trigger a staggering $2.5 trillion sell-off in equities and bonds globally, showing how interconnected the markets have become 2.

The scale of potential disruption is significant. As of early 2025, 286 Chinese companies were listed in the U.S. with a combined market capitalization exceeding $1.1 trillion, representing substantial investor exposure across multiple sectors 3.

While lawmakers cite security concerns, any delisting action would create ripple effects throughout global markets, potentially forcing institutional investors to rapidly reposition significant portions of their portfolios.

2️⃣ The Hong Kong hedge: Chinese firms’ strategic adaptation to U.S. regulatory pressure

Chinese companies have been systematically preparing for potential U.S. delisting by establishing secondary listings in Hong Kong, creating a strategic safety net.

Over 75% of U.S.-listed Chinese firms now maintain a presence in Hong Kong’s exchange, demonstrating a deliberate risk-management strategy developed over several years 1.