Atkins to Accelerate the Delisting of Chinese Stocks From the US Stock Exchanges in 2025/2026?

• Paul Atkins, the new head of U.S. SEC could accelerate the delisting of Chinese stocks from the U.S. stock exchanges.

• There are about 280 companies from mainland China that are listed in the U.S. with a combined market cap of about $880 billion.

• There could be two major reasons to accelerate this delisting (require Chinese companies to abide by US GAAP accounting and fully delist Chinese companies with ties to Chinese military).

Paul Atkins was confirmed as the new chairman of the Securities and Exchange Commission last week. With his confirmation, there has been an increasing risk of many Chinese companies that could be delisted from the US stock exchanges in 2025/2026.

In the past several years, despite some efforts by the various US regulators to delist Chinese companies with ties to military to get delisted from the US stock exchanges, some of these efforts have been blocked by the Biden administration. There are two major reasons why Atkins could accelerate this move to delist numerous Chinese stocks that are currently listed in the US stock exchanges.

• First, there have been continued push to require the Chinese companies listed on the US stock exchanges to abide by the US GAAP accounting.From the perspective of US companies, it would be unfair for them to abide by the more stringent US GAAP accounting requirements while the Chinese companies are not required to abide by these requirements making it easier for them to get listed in the US stock exchanges.

• Second, there could be further pressure on Atkins to fully delist Chinese companies that have ties to the Chinese military. Although there have been news about some Chinese companies that are currently listed in the US stock exchange with ties to the Chinese military getting delisted in the past few years, some of these Chinese companies have found loopholes to bypass these restrictions. As a result, many of these Chinese companies have remained listed on the US stock exchanges.

Now, with the ongoing tariff war between the United States and China (latest count was US putting 245% tariff on China made goods), this situation is getting out of hand. China has also put export restrictions on rare earth minerals. With the appointment of Paul Atkins as the new head of U.S. SEC, there have been increasing news flow about the Trump administration potentially putting additional pressure on the Chinese government (including restricting new IPOs and delisting of listed Chinese companies on the U.S. stock exchanges).

Given that the US stock markets are by far the most important and biggest capital markets in the world, if China is severely restricted in accessing the US capital markets through new IPOs and delisting of existing Chinese companies, this would have a tremendous negative impact on China.