Alibaba, other Chinese stocks drop on report White House considering China investment limits

Trader on the floor of the New York Stock Exchange during Alibaba IPO, September 19, 2014.Adam Jeffery | CNBCShares of Alibaba and other Chinese companies plunged in a sudden move after reports the White House is considering ways to limit U.S. investments in China. Bloomberg News reported on Friday Trump administration officials are weighing delisting Chinese companies from American stock exchanges and putting a limit on U.S. government pension funds’ exposure to the Chinese market.Alibaba shares dropped 5% on the report. Baidu and also traded lower. Those shares all trade on Nasdaq.The iShares China Large-Cap ETF dropped 1% in a sudden move. The ETF’s biggest holdings are China Construction Bank and Tencent holdings.The move would come as the U.S. and China are set to resume trade talks on Oct. 10 in Washington after both countries slapped billions of dollars of tariffs on each other’s goods. Delisting Chinese companies would affect billions of dollars in investment pegged to major indexes, just as the Chinese government is taking steps to increase foreign access to its markets.A White House spokesperson declined to comment. The exact detail has not been worked out yet and the plan is subject to President Donald Trump’s approval, Bloomberg News reported, citing people familiar with the matter. Trump had greenlit the discussion, the report said.Chinese currency yuan weakened to 7.15 against the dollar on the news.This is a developing story. Check back for updates.

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