Delisting speculation, and a new tea listing

“I think there are reasons on the U.S. side not to do this, which I would equate almost to a nuclear weapon. You do it, there’s no turning back.”

By Doug Young & Rene Vanguestaine

Amid escalating U.S.-China tensions, speculation has surged over the potential mass delisting of Chinese stocks from New York exchanges, a scenario dramatic enough to capture widespread media attention. Concurrently, an ambitious newcomer, Chagee, has confidently debuted on the Nasdaq, unfazed by geopolitical headwinds, aiming squarely at China’s burgeoning appetite for premium tea beverages.

The recent chatter about delisting Chinese stocks arises as the trade war intensifies. While President Trump has publicly articulated many grievances over tariffs and trade imbalances, he notably hasn’t raised the issue of forcibly delisting Chinese companies from U.S. exchanges. Yet, his Treasury Secretary, Scott Bessent, recently signaled nothing was “off the table,” fueling anxiety among investors. We believe such a move, if ever seriously considered, would be intended as a bargaining chip in trade negotiations rather than a genuine policy objective.

Could it realistically happen? History and practicality suggest not. Several years ago, concerns regarding audit transparency prompted intense U.S.-China discussions, ultimately resolved by China withdrawing state-owned enterprises from U.S. exchanges while permitting private companies’ audits to be accessible to U.S. regulators. This demonstrated that both sides recognized the severe repercussions of a mass delisting.

Indeed, executing a widespread delisting would carry catastrophic implications. It would irrevocably damage the reputation of U.S. financial markets as reliable venues for international listings, potentially triggering a mass exodus of global companies based in Europe, Latin America, and other Asian regions wary of future policy uncertainties. Wall Street’s own historical experience from the 1960s — when punitive tax measures inadvertently gave birth to Europe’s massive Eurobond market — offers a stark warning against reckless financial isolationism.

Investors, naturally, are wary. Yet, the prudent path remains clear. For those genuinely concerned about delisting risks but still attracted by Chinese market opportunities, investing in dual-listed Chinese stocks — with secondary listings in Hong Kong — provides a sensible safeguard. For others less convinced of immediate danger, patience in fundamentally sound companies should ultimately prevail.

A fresh brew in New York

While delisting anxieties simmer, Chagee, a rising star in China’s premium tea market, recently executed an impressive Nasdaq IPO, raising over $400 million and enjoying a 16% price jump on its first trading day. Differentiating itself from the crowded “bubble tea” market dominated by peers trading predominantly in Hong Kong, Chagee has smartly positioned itself as a purveyor of simplicity — high-quality tea and milk, without trendy additives.

The strategic decision to list in New York rather than Hong Kong appears savvy. Rather than compete among numerous similar tea brands in Hong Kong, Chagee offers American investors a compelling, easily differentiated narrative reminiscent of Starbucks’ successful “destination experience” approach. Indeed, we find the simplicity and purity of Chagee’s offering refreshingly appealing, highlighting its distinctiveness and market clarity in an often overly complicated industry.

Will this set a trend for more Chinese blockbuster IPOs in New York? Possibly. Companies with strong leadership positions and clear growth narratives — particularly in globally recognized sectors such as artificial intelligence and autonomous driving — continue to present attractive opportunities. Recent successes by companies like Pony AI and WeRide affirm this view. Market volatility might persist through ongoing trade tensions, but fundamentally sound stories will likely continue to find receptive audiences in New York.

In the end, despite geopolitical noise, quality offerings and clarity of strategy remain decisive factors for investors.

About China Inc

China Inc by Bamboo Works discusses the latest developments on Chinese companies listed in Hong Kong and the United States to drive informed decision-making for investors and others interested in this dynamic group of companies.

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