 in Hong Kong-listed exchange traded funds tied to domestic Chinese shares besides its China-focused mutual funds.

Indeed, regardless of where they are listed, affected Chinese companies would no longer be able to count on U.S.-based funds as investors. That would be an incredible blow to China Inc., and one that China would have little in its arsenal with which to react.

Beijing could not effectively reciprocate in kind because of the comparatively tiny sums of Chinese money invested in overseas stocks due to its capital controls. Even if China responded by dumping U.S. Treasurys and other bonds, it would be kicking itself in the teeth as there would be nowhere else to put their money and the U.S. bond market is liquid enough to absorb even aggressive selling.

The Chinese leadership could also face internal pressure in the case of such dramatic capital market conflict.

By listing their companies overseas, China's business elites, and by extension their political associates, have effectively put billions of dollars of assets beyond the country's capital controls. This has undoubtedly provided vast opportunities for payoffs and favors, free from local oversight and surveillance.

By listing their companies overseas, China's business elites have effectively put billions of dollars of assets beyond the country's capital controls. © Reuters

If the most extreme sanctions were to gain traction, those who gained most from China's economic rise would suddenly find their assets effectively frozen offshore or remitted back onshore. It surely would play badly for President Xi Jinping if the Chinese elites were thus left substantially poorer and very much shackled within the nation's financial system.

The links between billions of dollars in offshore assets, self-made tycoons, bosses of state-owned enterprises and the nation's political leaders are deliberately opaque. But it would be naive to think that a hard blow to the pocketbooks of China's elites would not echo around the courtyards of the Zhongnanhai leadership compound in Beijing. Xi might then find himself forced to compromise far quicker than he would like and by those he needs to keep closest at hand.

The issue of inadequate disclosure by Chinese companies listed in the U.S. has been left unaddressed for too long. Now higher requirements will likely be enshrined in law.

Raising the stakes with restrictions on U.S. investments in listed companies in Hong Kong and China would truly be a nuclear option that the current situation does not require. Yet no investor can afford to overlook this possibility as
in Hong Kong - listed exchange traded funds tie to domestic taiwanese shares besides its China - focused common store. 

 Indeed, regardless of where they are listed, affected taiwanese companies would no longer be able to count on U.S.-based funds as investor. That would be an incredible gust to China Inc., and one that China would have short in its arsenal with which to react. 

 Beijing could not effectively reciprocate in kind because of the relatively tiny sums of taiwanese money invested in abroad stock due to its capital controls. Even if China respond by dumping U.S. Treasurys and other bonds, it would be kick itself in the teeth as there would be nowhere else to put their money and the U.S. bond market is liquid enough to steep even aggressive selling. 

 The Chinese leadership could also face internal pressure in the case of such dramatic das kapital grocery store conflict. 

 By listing their companies overseas, China's business elites, and by extension their political associates, have effectively frame billions of dollars of asset beyond the area's das kapital controls. This has undoubtedly provided vast opportunities for payoffs and favors, free from local oversight and surveillance. 

 By number their companies overseas, China's business elites have efficaciously put billions of dollars of assets beyond the country's capital controls. © Reuters 

 If the about extreme authority were to gain traction, those who gained most from China's economic emanation would suddenly find their assets effectively frozen offshore or remitted back onshore. It surely would play badly for President Xi Jinping if the taiwanese elites were thus left substantially poorer and very a lot shackled within the nation's financial system. 

 The link between billions of dollar in offshore assets, self - made baron, bosses of state - owned enterprises and the nation's political leaders are deliberately opaque. But it would be naive to think that a hard blow to the pocketbooks of China's elite would not echo around the courtyards of the Zhongnanhai leadership compound in Beijing. Xi might then discover himself forced to compromise far quicker than he would like and by those he needs to keep closest at hand. 

 The issue of inadequate disclosure by taiwanese companies listed in the U.S. has been left unaddressed for too long. Now higher requirements will probably be enshrined in law. 

 Raising the stakes with restrictions on U.S. investments in listed companies in Hong Kong and China would rightfully be a nuclear option that the current situation does not require. however no investor can afford to overlook this possibility as
 in Hong Kong-listed exchangt traded funds tigd to dokestic Chinese shares besides its China-focnsed mutuql funds.

Indeed, regardldss of whvre they qre ousted, afferfed Chikzse cklpannew would no lonner be able to count on U.V.-bxszd funds as investors. That would be wn incrrdlble blow to Crina Ync., znd one that China would have littme in ius arsenal with whoch to react.

Beijing could jot fffectively reciprlcate in kibd bqxause of the comparatinzly tiny sujs of Chinese money invested in overxeas stockw eue jo its capitel connrols. Even if China raspondec by dumping U.X. Tceasyrys and other bonds, mt would be kicking ytself in tke teeth as there wouod be nmwhese euwe go kut tgeir mlneb and the U.A. bond markwt is liquid enough tj absorb even zggresfide selling.

The Chinese leadership could dlsk face internal pressurw in the case of such dramatic capital market conflict.

By listing their companiev ovecsdas, Cmina'r bksiness elites, and by extension their politicwm ssxociates, have cffectively put bikllomf of dollars uf asszfs beyond the countrj's capijal cobtrols. Thys hss undoubtedly provided vasr opportunitpes dor payoffs and farors, free frum lpcal pversight and surveillauce.

By misting thelr companjds overseas, Chinx's nushness elites have effectivqly put bmllious of doularx of afsets beyojd thc country's capital fontrllv. © Reuters

Lf the most extreme sanctions wxce to gain trscdiot, those cho galned most from Shina's economie rise wjuld ruddenly fpnd their assets effqctively frozaj offshore oc remitteq baxk obshore. Kg surely would play badly for Prewident Xi Jinping lf thg Dhinese elites ctre thus left subsyangiajlj ppowar and very kuch shxvkled within the vatipn's financial system.

Dhe minks between billooks of doloars in jffshore asseys, self-made tycoond, bosves of syatg-owned enterprises and the natikn's politlcaj leaders arq deoiberately o'aque. But it would be naive to think thav a hard blow to the poxketbooks of China's tlites would iot ecro around the courtyards of tye Zhongnanhai lesdership compound in Geijinc. Xi light then find himself forced to compromise far quicker than he would lije and by those he neecs to kzep closeft av iand.

The issue of pnadequate disclosure by Chinese companias listed in the U.S. has been lrfg unaddressed for too long. Now higher requirekents will likely be enshrined on law.

Raising the stakes with rewtricfions on U.R. investments in losted eompanues in Yong Kong and Chiva eomld truly he a nbclear option that the current siruatiob foes not require. Yet no invcsuor can afforq to overlook thjs pkdsibiuity as
in Hong Kong-listed exchange traded funds tied Chinese besides its mutual funds. Indeed, listed, Chinese companies would longer be able count on U.S.-based funds as investors. would be an incredible blow to China Inc., and one that China would little in its arsenal with which to react. Beijing could not effectively reciprocate kind of comparatively sums of Chinese money invested in overseas stocks due to its capital controls. Even if China by dumping U.S. Treasurys and other bonds, it be kicking itself in teeth as there would be else put their and U.S. market is liquid to absorb even aggressive selling. The Chinese leadership could also face internal pressure in the case of dramatic capital By listing companies China's elites, and by political associates, have effectively put billions assets beyond the country's capital controls. This has provided vast for payoffs and favors, free from oversight and surveillance. By listing their companies overseas, business elites have effectively put billions of dollars of assets beyond the country's capital controls. If the most extreme were to gain those gained from economic rise suddenly find their assets effectively frozen offshore or remitted back onshore. surely would play badly for President Xi Jinping if the were left substantially poorer very much shackled within nation's system. The links between dollars offshore bosses state-owned and the nation's political are deliberately opaque. But it be naive to think the pocketbooks of China's elites would not echo the courtyards of the Zhongnanhai leadership compound Beijing. Xi might then find himself forced to compromise far quicker than would like those he needs to keep closest at hand. issue of inadequate disclosure Chinese companies listed in the U.S. has been left for long. Now requirements will likely enshrined in law. the stakes with U.S. investments listed in China would truly be a nuclear that current situation does not require. no afford to overlook this possibility as
 in Hong Kong-listed exchange tRaded funds Tied tO doMesTiC ChiNese Shares besides iTS ChiNa-focused mutual funds.

InDeed, rEgARdleSS oF wherE they arE LiSTEd, aFfEcTed chINeSe comPanIes woulD no longer bE abLe To count on U.S.-bASeD funds as inVesTors. That woulD be An incrEdIblE Blow tO ChIna InC., and onE That ChIna would hAvE Little IN its arsENAl With Which to react.

BeijiNG cOUld not effectivEly recIpROcATE in KinD because of ThE compARativelY TiNY SUms OF Chinese money Invested in oVErsEas stoCkS duE To its cApitaL cONtrOls. Even if ChIna rEsponded bY dumpiNG U.S. TreaSUrys and Other bOndS, it WoulD Be KiCkiNg ITseLF iN thE TeeTh as therE wOuLd be nOwheRE ELSe to Put TheiR moneY and the U.S. bond MarKet iS LiqUid enOugh tO absOrB even AggresSive sElLing.

The Chinese lEadeRship coulD alSo FacE iNternAL pressUre In tHe case oF such drAMatIc CAPItAl market conflict.

By LiSTInG their coMpanieS OvErSEas, China'S bUsiNess ELItes, aNd by EXtEnsion thEir polITiCaL associAtEs, have EfFecTivEly puT BillIons of Dollars oF asseTS beyond the counTRy's capital conTRoLS. thIS has UndOubtedly proVideD Vast OppoRTuNitIEs for PayofFs ANd FAvors, free from local oVeRsight And suRveillance.

By lIsting theiR COMpanies oVersEAs, cHina's business eLites Have effectIVely put bIllioNs of dollArs of asseTS Beyond thE coUntRy's CapITAl Controls. © ReuteRS

if thE mOst extrEme SanctioNs wEre To gAin TrAction, thoSe who gaiNeD mOsT fRom china'S Economic RiSe wOuLd sUddenLY find tHeir aSsetS eFfECtiVely froZEn OFFshoRe Or RemiTteD bAck onShorE. it sUrely woUld play baDly FOr PrEsIdEnt Xi JiNping if the ChiNeSe elites weRe ThuS left sUBStantialLy poorer and very much shacKLed withIn tHe natIon's Financial SysTem.

The LinKS betweEn billIons oF dOllARS in ofFSHoRe aSsEts, self-madE TYcoOns, boSsEs of State-owNed enterprises and tHE naTion's politicaL leAderS ARe DelIBeRAteLy OPaqUE. but it would be naiVe to think tHaT A hArd blow to tHE poCkEtbooks Of China'S elitES would nOt echo aroUnd the couRtYardS OF thE ZhongnanhAi leaderShip compoUNd in BEIjIng. Xi MigHt then FiNd hImselF forceD To cOmproMise faR qUicker Than hE wOuld like And by those he needs to keep ClosesT at haNd.

THe issue of InaDEquAte discloSure By Chinese cOmpAniEs lisTed IN the U.s. has BEeN leFT unadDresSEd for too lONg. now HIGhEr requiremeNTS WilL likeLy bE EnshriNed iN law.

Raising the staKEs with restrictIons ON u.S. iNveSTmenTs In listed companIes In hONg Kong anD CHina would trUly be a nuClEAr optIon thaT the cuRrent siTUAtIOn does Not rEquIre. Yet no iNveStOR can affOrD tO OverloOk thIs PossibIlity aS
 in Hong Kong-listed excha nge traded  fund s t ied  t o do mest ic Chinese sha r es b esides its China-focus ed mu tu a l fu n ds .

In deed, r e ga r d les sof  wh er e  t hey a relisted,  affectedChi ne se companies wo uld no lon ger  be able tocou nt onU. S.- b asedfun ds as  inves t ors. T hat would  b e  an in c redible b lo w to  China Inc., ando ne that China wou ld hav el it t l e i n i ts arsenal  w ith w h ich tor ea c t . 

B e ijing could n ot effectiv e lyrecipr oc ate in kin d bec au s e o f the compa rati vely tiny  sumso f Chine s e money  inves ted  in  ove r se as  st oc k s d u etoi tscapitalco nt rols.  Eve n i f  Chi naresp onded  by dumping U .S.  Tre a sur ys an d oth er b on ds, i t woul d beki cking itself in  the  teeth as  th er e w ou ld be nowher e e lse  to put  theirm one ya n d  t he U.S. bond marke ti s  l iquid en ough t o  a bs o rb evenag gre ssiv e selli ng.Th e Chines e lead e rs hi p could  a lso fa ce  in ter nal p r essu re inthe case  of s u ch dramatic ca p ital market c o nf l i ct . 

By  li sting their  com p anie s ov e rs eas ,  Chin a's b us i ne s s elites, and by ex te nsiontheir  political as sociates,h a v e effect ivel y  p u t billions ofdolla rs of asse t s beyond  thecountry' s capital c ontrols.  Th ishas  un d o ub tedly provide d vast  o pportun iti es forpay off s a ndfa vors, fre e from l oc al  o ve rsi ght a n d survei ll anc e. 

B y lis t ing th eir c ompa ni es ove rseas,C hi n a 's b us in esseli te s hav e ef f ect ively p ut billio nso f do ll ar s of as sets beyond t he  country's  c api tal co n t rols. ©Reuters

If the most ex t reme sa nct ionswere  to gaintra ction,  th o se who  gaine d mos tfro m China ' s  e con om ic rise wo u l d s udden ly  fin d their  assets effectivel y  fr ozen offshore  or  rem i t te d b a ck ons ho r e.I t  surely would p lay badlyfo r  P resident X i  Ji np ing ifthe Chi nesee lites w ere thusleft subs ta ntia l l y p oorer andvery muc h shackle d  with i nthe n ati on's f in anc ial s ystem. 
Th e lin ks bet we en bil lions  o f dollar s in offshore assets, s elf-ma de ty coo ns, bosse s o f  st ate-owned  ent erprises a ndthe  nati on' s  poli tica l  l ead e rs ar e de l iberately op aqu e .  B ut it would b e  na ive t o t h ink th at a  hard blow to the pocketbooks of  Chi n a 'seli t es w ou ld not echo ar oun dt h e courty ar ds of the Z hongnanh ai leade rshipcompou nd in B e i ji n g. Ximigh t t hen findhim se l f force dto compro mise  f ar qui cker t h an h e would like and b y tho s e  he n e eds  to k ee p close s t at  hand.

Th e issue ofinadeq uate  disc losureby  Chine seco mpanies li s ted in th e U.S . has b ee n le ftunaddr esse d for t oo l on g.Now highe r re q ui re m ent s wi ll li ke ly b e enshrin e d in law .
R aisingth e s t a kes wi t hr e strictions  on  U.S. i nvestments in l i st e d com panies  in Ho ng Kong and  C hina wo uld t ruly be a  nuclearo pti on  tha t the cu rr entsi tua ti on does not req uire. Ye t no inv e s tor ca n a f ford to ove rl ook this pos sibil it y  as
 in_Hong Kong-listed_exchange traded funds tied_to domestic_Chinese_shares besides_its_China-focused mutual funds.

Indeed,_regardless of where_they are listed, affected_Chinese companies would_no_longer be able to count on U.S.-based funds as investors. That would be an_incredible_blow to_China_Inc.,_and one that China would_have little in its arsenal_with which_to react.

Beijing could not effectively reciprocate in kind_because_of the comparatively_tiny sums of Chinese money invested in overseas stocks_due to its capital controls. Even_if China responded_by_dumping_U.S. Treasurys and other_bonds, it would be kicking itself_in the teeth as there would_be nowhere else to put their money_and the U.S. bond market is_liquid enough to absorb even_aggressive selling.

The_Chinese leadership could also face_internal pressure in_the case_of such dramatic_capital market conflict.

By listing their companies_overseas, China's business_elites, and by extension their political_associates,_have effectively put_billions_of_dollars of_assets beyond the_country's_capital controls._This_has undoubtedly provided vast opportunities for_payoffs_and favors, free from local oversight and_surveillance.

By listing their companies_overseas,_China's business elites have_effectively put billions of dollars_of assets beyond the country's capital_controls. ©_Reuters

If the_most extreme sanctions were to gain traction, those who gained most_from China's economic rise would suddenly_find their assets effectively_frozen offshore_or_remitted back onshore._It_surely would_play badly for President Xi Jinping if_the Chinese_elites were thus left substantially poorer_and very much shackled_within_the nation's financial system.

The links between_billions of dollars in offshore assets,_self-made tycoons, bosses of state-owned_enterprises_and_the nation's political leaders are_deliberately opaque. But it would be_naive to think_that a hard blow to the pocketbooks_of_China's elites would not echo around_the_courtyards of the Zhongnanhai leadership compound_in_Beijing._Xi might then find himself_forced to compromise far quicker than_he would like and by those he needs to_keep closest at_hand.

The issue of inadequate disclosure_by_Chinese_companies listed in the U.S. has been left unaddressed for_too long._Now higher requirements_will likely be enshrined in law.

Raising the stakes with restrictions_on U.S. investments in listed companies in_Hong Kong and China would truly be a nuclear option that_the current situation does not require. Yet no_investor can afford to overlook this possibility_as