By Liqian Ren, Director of Modern Alpha
The recent move to potentially delist Chinese companies from American exchanges has made for good headlines. But the risk to Chinese equities - particularly the non-state-owned segment of China or emerging markets, where China is about one-third of total weight - is minimal. The risk comes mainly from the expected growth potential of the global economy.
Unless the U.S.-Chinese relationship reaches a point of no return with substantial escalation to financial "nuclear war," which would be even more severe than the trade conflict, investors should realize that the