Bridgewater Sold All China Stocks Listed in US in 2nd Quarter

Bridgewater Associates sold all its shares of Chinese stocks listed in the United States in the second quarter.

The move, which comes amid a simmering trade war between Washington and Beijing, is likely to amplify fears about the delisting of Chinese stocks on US exchanges, a long-running concern that reared again in April after President Trump launched his ‘reciprocal tariffs’.

One of the world’s biggest hedge funds, Bridgewater sold its entire holdings in about 16 Chinese stocks and two China-focused exchange-traded funds with a total value close to $1.5 billion, according to calculations by Reuters based on a US regulatory filing on Wednesday.

ALSO SEE: CK Hutchison Rates Ports Deal With Cosco a ‘Reasonable Chance’

The filing, which is a quarterly mandatory requirement for investment managers to disclose US equity holdings, does not include Bridgewater’s holdings in Chinese stocks outside the US, such as those listed in Hong Kong or mainland A-shares.

Over the April to June period, Bridgewater’s largest selling included 5.7 million shares in Chinese e-commerce giant Alibaba, 2.8 million shares in online retailer JD.com and 2 million shares in search engine firm Baidu, the filing showed.

Meanwhile, it added more shares in major US tech firms such as Nvidia, Alphabet and Microsoft.

These sales come at a time when many analysts say the Chinese economy is flagging and facing a deflationary crisis in the second half of this year because of weak domestic consumption and an over-reliance on exports generated by industrial manufacturing bolstered by massive state subsidies.

Bridgewater, which manages over $150 billion in assets, didn’t immediately respond to a request for comment by Reuters.

Dalio sells out

Founded by billionaire and longtime China investment ‘bull’ Ray Dalio about 50 years ago, the Connecticut-based fund has been an active China investor for many years.

But Dalio sold his remaining stake in Bridgewater last month.

Bridgewater launched its China onshore fund in 2018 and has since rapidly grown its assets under management in China to about 50 billion yuan ($6.96 billion).

The fund’s risk-off stance on China comes as US President Donald Trump raised tariffs on imports from China to over 100% in early April, while China reciprocated.

The tit-for-tat moves sent shockwaves through global markets, leading to big corrections in both US and China stocks in April.

Delisting concerns

Investor concerns over the possible forced delisting of Chinese companies from US exchanges – stemming from doubt about the reliability of Chinese companies’ financial data and audit standards – had been on a backburner after some bilateral cooperation on audits in 2023.

But the issue flared again in April after Trump launched his ‘reciprocal tariffs’ and Treasury Secretary Scott Bessent noted that “everything is on the table” because of the huge imbalance in US trade dealings with China.

More than 100 Chinese companies, including tech giants Alibaba and JD.com, are listed on US exchanges and have a collective market cap of around $1 trillion.

Companies without a secondary listing, such as PDD, which operates e-commerce platforms Pinduoduo and Temu, and Full Truck Alliance, China’s “Uber for trucks”, were seen as some of the most vulnerable if a forced delisting happened.

Converting shares from the US to Hong Kong stock exchange could drain liquidity and harm valuations. Companies may also face the risk of US state funds divesting.

In April, Goldman Sachs estimated that US institutional investors owned about $830 billion in Chinese stocks, including American Depositary Receipts (ADRs) and warned earlier that they may have to offload them if financial decoupling between China and the US peaks.