Warning of external flows at 800 billion dollars … Goldman refers to a “extremist” scenario

In an extreme scenario of financial separation between the two largest economies in the world, Goldman Sachs warned that American investors may be forced to get rid of Chinese shares worth $ 800 billion.

In a memorandum issued yesterday, Wednesday, the bank stated that about 7% of the market value of Chinese companies listed in America – what is known as “American Deposit Certificates” – is owned by American institutions, according to CNBC.

American investment institutions currently have American deposit certificates for Chinese companies estimated at $ 250 billion, while their investment in Hong Kong shares is only 522 million dollars.

“This means that these investors may not be able to go to the Asian Financial Center to buy shares if companies such as Ali Baba are removed from America,” according to Goldman.

Fears began to increase with the continuing stalemate between Washington and Beijing about a possible business deal. Speculation of canceling the inclusion of Chinese companies from the American stock exchanges has become part of the worst results facing international banks in light of the possibility of financial separation between the two main economies. Speculation increased after Treasury Secretary Scott Bessent stated that “all options are on the authority of talks with China.

Goldman wrote, “The high levels of uncertainty in the global trade system led to extraordinary fluctuations in global capital markets, concerns about global recession and the risk of separation between the two largest global economies in other strategic categories,” Goldman wrote.

He added that in the case of deletion, American deposit certificates and the MSCI index, China, may witness a decrease in the evaluation 9% and 4%, respectively, from the current price.

On the other hand, in light of the extremist scenario itself, Chinese investors may have to get rid of their US financial assets, which may reach $ 1.7 trillion, about 370 billion dollars in shares and $ 1.3 trillion in bonds.

JP Morgan estimated earlier that the Certificate of US Deposit Certificates from American stock exchanges could lead to removing them from global indicators, causing total outflows of $ 11 billion.