TheChek News Flow

It seems only logical. The world’s two exporting giants, China and the European Union, could team up to resist U.S. President Donald Trump’s trade offensive. In practice, that will be tough.

Both sides are poking out olive branches, or twigs. Beijing removed symbolic sanctions against five members of the European Parliament whom it judged overly outspoken about Uyghur minority rights. Eurocrats leaked the possibility of replacing tariffs on Chinese electric vehicles with administratively determined minimum prices.

That’s a long way from ditching the China “derisking” policy Europe enshrined a few years ago. The bloc will prioritize patching relations with Washington, only inching toward Beijing as a hedge, Brussels-watchers agree. “Lowering barriers against China is not a good idea for Europe,” says Davide Oneglia, director of European and global macro at TS Lombard. “It’s much more reasonable to be aligned with the U.S.”

Arithmetic is one compelling reason. The EU racked up a record 198 billion euros ($225 billion) goods trade surplus with the U.S. last year. Its deficit with China was €305 billion, nearly twice the prepandemic level. “Europe fears that if it strengthens trade ties, it will be flooded by cheap Chinese products,” says Carsten Brzeski, global head of macro at ING Research.

Europe watched China obliterate its early lead in green technology like solar panels and wind turbines, using what the Continent considers unfair subsidies, and fears a repeat on electric vehicles. Beijing’s critical support for Russia’s invasion of EU neighbor Ukraine also rankles.

“Europe is no longer naïve on China,” says Eoin Drea, senior researcher at the Wilfried Martens Centre for European Studies. “It’s not the El Dorado everybody thought 10 years ago.”

A few inches in an $800 billion bilateral trade relationship could still impact economies and companies, however. Prohibitive Chinese tariffs on U.S. imports could spell opportunity for competing European suppliers of advanced industrial or medical equipment, notes Jacob Gunter, lead economics and industry analyst at the Mercator Institute for China Studies.

“Companies like Siemens or ThyssenKrupp may compete with General Electric for Chinese market share,” he explains. European jet maker Airbus could take advantage if China continues to boycott U.S. rival Boeing.

More significantly, Trump’s trade war could accelerate the integration of the Chinese and European auto industries. While European brands precipitously lose Chinese customers, China’s innovative EV and hybrid manufacturers threaten to invade Europe.

Brussels’ task is to force them to produce within Europe, preferably through joint ventures that transfer technology to Old World partners. “Europe needs to do a reverse China, trading market access for know-how,” Drea comments.

It’s starting to work, driven by the lower-cost European firms who are most vulnerable. Renault and China’s Geely Automobile Holdings announced a London-based joint venture last year to make hybrid and high-mileage internal combustion engines. Stellantis, which includes the Chrysler, Fiat, and Peugeot brands, has tied up with Zhejiang Leapmotor Technology. Chinese EV champion BYD expects to start producing at its own plant in Hungary later this year.

“I fully anticipate that the Chinese will replicate the Japanese and Korean nearshoring strategy in Europe,” says Germany-based industry analyst Matthias Schmidt.

The Trump administration could still push Europe into a warmer embrace of China. But it would have to try pretty hard. “In the long run the EU and China will be competitors,” ING’s Brzeski says. “It’s a deteriorating economic relationship.”

Stock Market Bulls Have Gone Into Hiding. Why Our Money Pros Are the Most Bearish in Nearly 30 Years.

Big Money pros are more anxious now than during the bursting of the dot-com bubble, the 2008-09 financial crisis, and the Covid-19

America’s money managers are more bearish today than they have been in nearly 30 years. Barron’s latest Big Money poll of professional investors finds 32% of respondents bearish on the outlook for stocks over the next 12 months—the highest percentage since at least 1997.

Just think about all the crises investors have weathered since then: the bursting of the dot-com bubble, the 9/11 terrorist attacks, the collapse of Lehman Brothers and the 2008-09 financial crisis, the Covid-19 pandemic. And yet the Big Money pros are more anxious now than during any of those painful points for the financial markets, the economy, and the country.

The bulls’ ranks also stand at historic levels in our spring survey—historically low, that is. Just 26% of respondents call themselves bullish on the market’s prospects, the smallest percentage since 1997.

A full 50% of managers were bullish last fall, while only 18% were bearish. The change in sentiment largely reflects worries about the potential impact of the Trump administration’s tariffs on corporate earnings and the economy. Although President Donald Trump has softened his stance since announcing tariff hikes on April 2, and has shown a willingness to make deals with both traditional allies and China, the managers remain concerned about the possibility of a global trade war.

“Trump may have overplayed his hand on tariffs,” says Harris Nydick, managing member and co-founder of CFS Investment Advisory Services in Totowa, N.J. “This is one of the top five times in my career for fog and murkiness. There are so many unknowns.”

The S&P 500 index has fallen about 4% this year after two years of double-digit gains. Tariff worries are only partly to blame, however. Equity valuations were unsustainably high at the start of the year, and investors’ concentrated bets on beneficiaries of artificial-intelligence technology were rocked in late January when China’s DeepSeek revealed an AI model built more efficiently, and at far lower cost, than U.S. models.

Although stocks have rebounded from the lows reached after Trump’s tariff announcement, the Big Money managers think more selling may be in store. Some 58% say the stock market is overvalued, while 38% call stocks fairly priced. Only 4% say the market is undervalued.

The managers’ clients are even more pessimistic than the pros; 56% say their clients are bearish.

Bill Smead, founder and chief investment officer of Smead Capital Management in Phoenix, calls this “one of the craziest junctures for the markets” that he has ever seen. “We needed to unwind growth-stock mania,” he says, but adds that the tariff news led investors to “slaughter things that should do better,” namely industrial and consumer stocks that have been hit hard by trade-war concerns.

Barron’s conducts the Big Money poll twice a year, in the spring and fall, with the help of Erdos Media Research in Ramsey, N.J. The latest poll was mailed out in late March, with supplementary tariff-related questions added in early April. The spring survey drew 119 respondents.

The optimists expect the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite to end the year about 4% to 7% above recent levels, based on their mean forecasts. But the bears see a 7% decline for the Dow and low-double-digit losses for the S&P 500 and Nasdaq. Forty-two percent of respondents describe themselves as neutral in the latest poll.

Only 20% of Big Money managers indicate they approve of Team Trump’s tariff policy, while about 80% put the odds of a tariff-related recession at 40% or higher. Still, 60% consider the market’s tariff-related tempest a buying opportunity.

Several respondents lamented the fact that the White House isn’t focusing on policies that might spur more immediate growth. “I hope the administration begins to take a look at the process of deregulation,” says John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, based in New York.

He isn’t alone: 38% of poll respondents say deregulation ought to be the administration’s top economic priority this year.

Simply put, much of the optimism about a second Trump administration unleashing animal spirits on Wall Street has evaporated since stocks surged shortly after Trump defeated former Vice President Kamala Harris in November.

“Companies are frozen; CEOs are wondering if they should play the long game or short game,” says Matthew Neyland, chief investment officer at SK Wealth Management in Providence, R.I. “There are things that could be done to make the mergers and acquisitions process easier that would help.”

Neyland says banks might be willing to lend more if they had more flexibility with regard to capital requirements. At the same time, “burdensome reporting” regulations make it more complicated for public companies to do business and have led more companies to stay private, he says.

Deregulation and tax-cut extensions may be coming, but Trump has given the market “the spinach first,” says Eric Green, chief investment officer at Penn Capital Management in Philadelphia. Green says he expects “more shoes to drop” before the market selloff is over.

He also expects a rebound in M&A activity, but notes that companies don’t want to announce major transactions until there is more clarity about tariffs. “They’ve been overwhelmed by tariffs,” he says of the White House and Congress. “Everything else might be happening, but slowly. It’s a matter of time.”

What is the biggest risk the stock market will face in the next six months? Among survey respondents, 24% cite an economic slowdown, 19% say a recession, and 14% say political turmoil in the U.S. Carter Randolph, CEO of the Randolph Company in Cincinnati, is the sole poll participant who sees no chance of a recession in the next year. Although investor and business sentiment hasn’t been good, consumer spending has held up, he says, adding that “sentiment isn’t a good investment tool.”

Advertisement - Scroll to Continue

But others aren’t as dismissive of widespread worry on Wall Street and Main Street. Joe Gilbert, a portfolio manager at Integrity Asset Management in Rocky River, Ohio, says the economy looks to be headed toward a downturn. “Tariffs have caused things to come to a standstill,” he says. “It makes it tough to have confidence, and confidence is fuel for the economy, so a recession is more likely than not.”

The Bureau of Economic Analysis reported on Wednesday that gross domestic product, adjusted for inflation, fell at an annualized rate of 0.3% in the first quarter, largely due to a surge in imports ahead of the implementation of tariffs. Real GDP grew 2.4% in last year’s fourth quarter.

Economic concerns are a big reason for gold’s record-breaking rally this year. Bullion has gained almost 27% year to date, to a recent $3,312 an ounce. Gold is often viewed as a defensive holding, a commodity with currency-like qualities that performs well when the dollar is weakening. The Big Money managers are fans: 58% say they are bullish on gold.

Oppenheimer’s Stoltzfus says he thinks it’s fine for investors to own a little gold, noting the price has gotten a boost largely due to buying by the central banks of China, India, and other emerging markets seeking to diversify beyond the dollar. But Tom Forester, manager of the Forester Value fund, says gold miners might be a better play.

Forester’s fund owns Agnico Eagle Mines and Alamos Gold. Both are trading below their five-year average forward price/earnings multiples, he says, and are benefiting from lower oil prices, which reduces costs. Both are Canadian companies.

Many Big Money participants say they are looking beyond the U.S. for better values this year, with 70% calling themselves bullish on non-U. S. stocks. Charles Zhang, founder and president of Zhang Financial in Portage, Mich., tells Barron’s that he likes both developed and emerging market stocks, and favors the iShares MSCI EAFE Value exchange-traded fund and the Vanguard FTSE Emerging Markets ETF. “The U.S. dollar is weaker; that and a stronger euro are helping international stocks,” he says.

Zhang, No. 1 in the Barron’s ranking of independent advisors, also sees potential for Chinese stocks to keep rising, noting that Alibaba Group Holding and other leading Chinese stocks still look reasonably priced. Alibaba is up more than 40% year to date but trades for just 13 times the next 12 months’ expected earnings.

Better prices elsewhere, coupled with frustration about U.S. trade policies, have led some investors to throw in the towel on U.S. assets. “Some clients are apoplectic,” says Sandra S. Martin, managing director of Martin Investment Management, which has offices in Palm Beach Gardens, Fla., and Evanston, Ill. She says some of the firm’s Asian clients are now focusing more on international stocks.

It isn’t all doom and gloom in the investment world. A volatile start to 2025 has created better buying opportunities in some stocks that had become too rich. “The average investor needs to think for the long term,” says Joseph Parnes, president of Technomart Investment Advisors in Baltimore. He calls himself a contrarian, and bullish. “You should take advantage of downturns, and within two to three years we should see solid growth,” he says.

Sharon Hill, a senior portfolio manager at Vanguard, likes dividend-paying stocks, particularly in the banking and pharmaceutical industries, and especially as bond yields retreat. “High-yielding stocks are already more attractive as a safety play,” Hill says.

She expects volatility in the bond market to make them even more so.

Many Big Money men and women are upbeat about the outlook for bonds. Nearly 75% of the survey participants say their weighting in fixed-income assets is higher than six months ago, while 70% say they are bullish on bonds. “There is still value in bonds,” says Erica Snyder, CEO of Hunter Associates, with offices in Pittsburgh and Salem, Ohio. “We see the Federal Reserve stepping in to cut interest rates a little bit a few times this summer.”

Rate cuts could put more downward pressure on the 10-year Treasury yield, which has fallen in recent months to a current 4.17%. Sixty-two percent of Big Money respondents expect the 10-year yield to be 4% or lower a year from now.

Lower bond yields are a boon to risk assets, prominently including equities. Jose Medeiros, a managing partner at Stonerise Capital Partners in San Francisco, likes the prospects for Meta Platforms, Amazon.com, and Alphabet. “Tech isn’t a fad; it is a growing part of the global economy, and that isn’t going to change,” he says. “Tech companies are growing earnings at a much faster rate than the broader market, with much higher margins and better cash-flow generation. Tech stocks should trade at higher multiples on that alone.”

John Maffei, chief investment officer at MFM Capital Management in Orlando, Fla., says he has been “looking to scoop up values,” particularly dividend payers, as the market has fallen. “The selloff in some stocks has been overdone with this market volatility,” he says, adding that his clients aren’t panicking.

Still, 2025 is likely to remain a year of surprises. And if subsequent quarters mirror the first, investors could be in for a tumultuous ride. “It is a difficult market,” says Ken Laudan, manager of the Buffalo Blue Chip Growth fund. “You have to be comfortable being very uncomfortable.”

If the Big Money managers are preparing for more market turbulence, the rest of us should be, too.

Killer fungi to spread as climate heats up

A warming world accelerates rise of infection-causing species in echo of television series ‘The Last of Us’

Rising temperatures will drive the global spread of a killer fungus that infects millions of people a year, according to new research on how climate change is stoking severe disease threats.

The Aspergillus family could expand its reach to more northerly swaths of Europe, Asia and the Americas, underscoring the stealthy menace of moulds already estimated to be a factor in 5 per cent of all worldwide deaths. 

Climatic shifts are broadening the geographical reach of many potentially lethal pathogens, such as those borne by mosquitoes. Fungi are a particular peril, due to their hard-to-detect spores, a shortage of treatments for the diseases they trigger, and growing resistance to existing drugs.

The world is now approaching a “tipping point” in the proliferation of fungal pathogens whose habitats range from arid earth to warm damp corners of houses, warned Norman van Rhijn, co-author of the new Aspergillus research.

“We’re talking about hundreds of thousands of lives, and continental shifts in species distributions,” said van Rhijn, a Wellcome Trust research fellow at Manchester university who specialises in fungal infections and microbial evolution. “In 50 years, where things grow and what you get infected by is going to be completely different.”

The fictional brain-altering fungus portrayed in the post-apocalyptic television series The Last of Us as wiping out much of humanity brought the threat to a wider audience. But the danger in the real world is still under-appreciated.

Mycology, the study of fungi, is a field of many mysteries. More than 90 per cent of fungal species “remain unknown to science”, according to a 2023 report by the UK’s Royal Botanic Gardens, Kew. That makes them much less well understood than big parts of the plant and animal kingdoms. 

About 3.8mn people each year die with invasive fungal infections, with the pathogen being the main cause of death in 2.5mn of those cases, according to research published last year.

A leading danger is aspergillosis, a lung disease caused by aspergillus spores that can spread to other organs including the brain. Many infections are spotted late or never, because of medical practitioners’ unfamiliarity or because symptoms are mistaken for those of other conditions.  

Aspergillus, named in the 18th century for its resemblance to a device used to sprinkle holy water, has brought humanity benefits as well as jeopardy.

Some species have uses ranging from industrial chemistry to the fermentation of soy sauce and sake, but others are potentially hazardous to health.

While most people don’t get sick from inhaling aspergillus spores, the mortality rate can be high if infection takes root. They are a particular threat to the growing numbers of people with immune systems weakened by conditions such as asthma or cystic fibrosis, or through medical treatments such as chemotherapy. 

The species Aspergillus fumigatus was named as one of four critical fungal pathogens that posed the highest risk, according to the first ever such list of threats published by the World Health Organization in 2022. 

The latest fungal research, funded by Wellcome and released on Saturday, said that A. fumigatus could spread to an additional 77 per cent of territory by 2100 if the world continues to use fossil fuels heavily. Its range would push towards the North Pole, exposing an extra 9mn people in Europe to infection.

The species can grow “astonishingly quickly” at high temperatures in compost where it lives, said Professor Elaine Bignell, co-director at the MRC Centre for Medical Mycology at Exeter university. 

That could have equipped it to survive and thrive in the human body’s temperatures of around 37C. “Its lifestyle in the natural environment may have provided A. fumigatus with the fitness advantage needed to colonise human lungs,” Bignell said. 

A second species in the latest study, Aspergillus flavus, lives on many crops and could spread into an additional 16 per cent of territory by 2100, the researchers project.

This would give it new or bigger footholds in north China, Russia, Scandinavia and Alaska, while making some existing habitats in African countries and Brazil inhospitable. That disappearance would have mixed effects, since it would disrupt ecosystems in which aspergillus plays a vital role recycling chemicals crucial to life.

The prospect of A. flavus geographical spread was “potentially very worrying”, said Darius Armstrong-James, professor of infectious diseases and medical mycology at Imperial College London. Research has suggested the species has caused disease outbreaks in countries such as Denmark, he added. 

A. flavus also produces damaging chemicals called aflatoxins that can cause cancers or life-threatening liver damage. Higher temperatures and CO₂ levels can boost the toxin’s production and contaminate its crop hosts, scientists have found. 

“There are serious threats from this organism both in terms of human health and food security,” Armstrong-James said, adding that recent data suggested A. flavus may develop high resistance to fungicides.

The development of anti-fungal medicines has been hobbled by the financial unattractiveness of investing in them, because of high costs and doubts over their profitability.

The new Aspergillus research adds to a growing body of work that suggests extreme weather events and related phenomena such as wildfires are likely to boost the spread of dangerous fungi.

Droughts followed by heavy rain may trigger soil disturbance and spore release into the air, said Brittany Bustamante, a University of California, Berkeley scientist studying the epidemiology of aspergillosis.  

UC Berkeley is leading a five-year project to use big data to analyse medical records from 100mn patients in the US, to identify factors that affect the incidence and severity of fungal infections.

The researchers have found that fungal pathogens such as Coccidioides, the cause of the potentially severe respiratory disease Valley fever, spread more widely after drought and other climate-linked changes. 

Coccidioides, which lives in the soils of hot and dry regions, has already expanded its habitat from the south-western US into Washington state. 

Since 2020, data suggested the biggest increases in aspergillosis had been in Latino individuals and people who lived in rural areas, Bustamente said.

The reasons for this were not clear, but could be linked to people who’d had severe Covid — and perhaps were unable to access treatment from overwhelmed health systems.

“Given the potential for climate change to drive future respiratory illness surges, secondary fungal infections like aspergillosis are likely to remain a serious public health concern,” Bustamente said. “And the people most at risk will likely be those already facing structural disadvantages and greater exposure to environmental risks like pollution.”

Shell says it would rather buy back its own shares than bid for BP

First-quarter profits drop 28% but Shell maintains $3.5bn-a-quarter buyback rate

Shell’s chief executive has said he would rather buy back more of his company’s own shares than launch a takeover bid for rival oil major BP.

“We will always look at these things, but you are also looking to see what is the alternative,” Wael Sawan told the Financial Times. “Right now, buying back Shell [shares] for us continues to be absolutely the right alternative to go for.”

Shell has been persistently linked to a bid for BP after a 32 per cent drop in the latter’s share price over the past year. Elliott Management, the activist hedge fund which has built a 5 per cent stake in BP, has warned that the company faces a takeover unless its management makes deeper cuts to its costs and spending.

Sawan’s comments on Friday came as Shell announced in its first-quarter results that it would hand $3.5bn to investors by buying back its own shares, the 14th consecutive quarter in which it has spent more than $3bn to reduce its share count.

Shell reported adjusted earnings of $5.6bn for the first quarter, down 28 per cent year on year but roughly 10 per cent ahead of analysts’ expectations. Its shares closed up 2.15 per cent on Friday.

Sawan said Shell was well prepared for lower oil prices in the months ahead, after crude dropped to a four-year low in April over concerns about the global economy and increased supply from the oil cartel Opec. Brent crude was trading at $63 a barrel on Friday, down from $76 at the start of the year.

Sawan said the company’s balance sheet was in the best shape for a decade, with gearing at less than 19 per cent, or 7 per cent excluding the leases Shell has on its equipment. “That’s not bad going into some of the choppy weather we see,” he said.

“The last two years was all about getting leaner and fitter. We have been taking steps in anticipation of what could be a softer environment. So our plan is unchanged,” he said.

Sawan said Shell would be able to continue to pay its dividend, which it held at 36 cents a share in the first quarter, at a $40 oil price and that the company could still buy back $6bn to $7bn of shares annually even if oil fell to $50 a barrel.

Private equity’s bind should prompt an investor rethink

Returns are likely to be lower in a world of weaker growth, higher interest rates and a slump in dealmaking

Canadian and Danish pension funds have been backing away from new US private equity allocations. And Chinese sovereign wealth funds have turned off their money tap to the industry more comprehensively. But even investors in countries that haven’t been threatened with annexation or been made subject to eye-watering tariffs should reassess their exposures to private equity.

Critics have long caricatured American private equity as an outsized manager remuneration scheme attached to a basket of leveraged small cap stocks. This is not completely fair. But a combination of elevated borrowing costs, lofty US public stock valuations and a softer economic outlook all make for a hostile investment landscape and point to weaker returns.

Moreover, the steep uptick in US policy uncertainty that has accompanied the first 100 days of Donald Trump’s second presidential term creates profound challenges for investors. “Policymaking has been volatile bordering on erratic. And valuation is negatively correlated to volatility,” says John Bilton, head of global multi-asset strategy at JPMorgan Asset Management.

This volatility throws a spanner in the works of the private equity machine. Unlike listed markets, it is hugely expensive to make and then reverse private equity allocation decisions. So, when faced with a spike in policy uncertainty, private market investors tend to hit the pause button on fresh commitments, creating a real challenge for fundraising.

Stock market gyrations that come with policy flip-flops also create challenges in the buying and selling of companies in the private market. As Ludovic Phalippou, professor of financial economics at Oxford university, tells me, private company valuations are benchmarked to public market peers, and when prices are flailing, dealmaking grinds to a halt.

That is also bad news for existing investors. According to PitchBook, a market research firm, around $1tn of the $3.5tn total US private equity assets under management consists of “dry powder” — capital that is contractually committed by investors, but has not yet been called upon.

While the mountain of dry powder is often trumpeted as a key strength for managers, being able to provide a trillion dollars of cash when needed can be a problem for investors. One source of cash in their liquidity calculus are forecast distributions from the private equity funds they already hold. And to make distributions, funds must sell portfolio companies or engage in financial engineering.

But according to Bain & Company’s Global Private Equity Report, distributions as a percentage of net asset value have fallen from an average of 29 per cent in the period from 2014 to 2017 to only 11 per cent today. PitchBook estimates there are more than 12,000 US portfolio companies — around seven-to-eight years of inventory at the observed pace of exits. This is much higher than the five-and-a-half-year median exit time they’ve observed across the industry to date. When anticipated distributions fail to show up, investors need to look elsewhere for cash to meet capital commitments they’ve made to other private equity funds.

Yale University — pioneer of the “endowment model” of alternative-heavy investments under David Swensen’s leadership — looks like a case in point. It is reported to have appointed advisers to find buyers for up to $6bn of assets. While sales may be an effort to get ahead of potential tax hikes on university endowments being discussed by Congress, they also look necessary if the fund wants to stop its allocation to private equity from shooting up. According to quantitative analysis firm Markov Processes International, Yale has just over $8bn of unfunded capital commitments to private equity funds outstanding at the end of 2024.

Michael Markov, the firm’s chief executive, tells me that capital calls could typically have been expected to be funded by distributions from existing private equity holdings. But, given the slower pace of distributions, it’s unrealistic to count on this cash. Markov estimates that without offloading existing stakes, the share of Yale’s total endowment allocated to private equity may rise from 47 to perhaps 55 per cent. Not ideal.

Given its diversification characteristics, private equity has a role in portfolios. But in a world of weaker growth and higher interest rates, returns are likely to be lower. Furthermore, while it is never simple for investors to manage cash calls and illiquidity, overwhelming US policy uncertainty intensifies the challenge. Moments like these remind us why investors in illiquid assets should demand additional returns to compensate for risk.

Heads of congressional panels say Baidu, JD.com and others have military links that pose ‘unacceptable risk’ to investors

The heads of two Congressional panels have urged the Securities and Exchange Commission to delist Chinese groups, including Alibaba, that they say have military links that put US national security at risk.

John Moolenaar, the Republican chair of the House China committee, and Rick Scott, the Republican chair of the Senate committee on ageing, wrote to SEC chair Paul Atkins on Friday to ask his agency to take action against 25 Chinese groups listed on American exchanges.

The targets also include search engine Baidu, online retail platform JD.com and the popular social media platform Weibo.

“These entities benefit from American investor capital while advancing the strategic objectives of the Chinese Communist party . . . supporting military modernisation and gross human rights violations,” the lawmakers said in the letter, which was obtained by the Financial Times. “They also pose an unacceptable risk to American investors.”

Moolenaar and Scott said no matter how commercial the Chinese groups appeared on the surface, they were “ultimately harnessed for nefarious state purposes”, partly because of China’s military-civil fusion programme which requires Chinese companies to share technology with the People’s Liberation Army when so ordered by Beijing.

The push marks the latest US effort to counter China and reduce its ability to use American capital, technology and expertise to modernise its military.

The two countries are also embroiled in a trade war that has exacerbated tensions between Washington and Beijing. The CIA on Thursday also released two Chinese-language videos designed to help them recruit more spies inside China.

Moolenaar and Scott said the extent of CCP control over Chinese companies was “systemically concealed from US investors” and Chinese law created “unpredictable risk to US investors that enhanced disclosures cannot mitigate”. They added many of the companies they cited in their letter were “not merely opaque” but were “actively integrated into the Chinese military and surveillance apparatus”.

They said the SEC had the tools and authority under the Holding Foreign Companies Accountable Act to “suspend trading and compel delisting by suspending or revoking the registration of the securities of Chinese companies that do not adequately protect American investors”.

“The SEC can — and must — act,” Moolenaar and Scott wrote.

The targets include Pony AI, which makes autonomous driving technology, and Hesai, a laser sensors group that the Pentagon has put on a list of groups with alleged military ties, which the company has denied.

They also include Tencent Music, a streaming platform owned by Tencent Holdings, which has already been placed on the Pentagon’s blacklist. Another group is Daqo New Energy Corp, a polysilicon producer that has previously been put on a US commerce department blacklist for allegedly engaging in forced labour in Xinjiang.

The lawmakers said the groups were just a subset of Chinese companies that were “accessing US capital while serving a genocidal dictatorship and our foremost geostrategic rival”.

There were 286 Chinese companies on US exchanges as of March, according to the US-China Economic and Security Review Commission, which was created by Congress to investigate the security implications of trade and economic relations between the US and China. 

The move comes as some investors in the US have become concerned that the US-China trade war could escalate into a capital war.

“This multitrillion-dollar US investor underwriting of our principal adversary over these many years will now gradually draw to a close, much like our willingness to continue tolerating China’s grossly unfair trade practices,” said Roger​ Robinson, former chair of the US-China Economic and Security Review Commission who now runs his own consultancy.

Atkins, who was sworn in as SEC chair last month, has yet to announce policy moves focused on China. His predecessor, Gary Gensler, heightened scrutiny of securities associated with Beijing.

Asked in his confirmation hearing about ensuring Chinese groups comply with US standards, Atkins said: “Accounting and auditing is really crucial obviously to investor protection and to the capital markets.”

In addition to pushing for action on Chinese companies in the US, the House China panel has upped scrutiny of American financial groups that work with, or invest in, Chinese companies that have alleged military ties or that face accusations of human rights abuses.

The FT has requested comment from each of the companies.

​The Chinese embassy in Washington said Beijing opposed the US “overstretching the concept of national security, using national apparatus and long-arm jurisdiction to bring down Chinese companies”. 

“We oppose turning trade and technological issues into political weapons,” said Liu Pengyu, the embassy spokesperson.

The SEC on Friday said Atkins will respond to members of Congress directly.

Agreement allows Ligue 1 to explore deals with other broadcasters or potentially show games itself

The French football league and media group DAZN have settled their broadcast rights dispute, allowing the league to open talks with other broadcasters or potentially set up its own channel to screen matches.

The settlement, confirmed by both parties on Friday, concludes several months of negotiations and a legal battle.

DAZN last year agreed to pay about €400mn a year for the rights to show the majority of Ligue 1 matches from 2024 to 2029. But subscriber numbers have not met its expectations, losses were piling up and the broadcaster argued that the league was not doing enough to tackle piracy.

The UK-based broadcaster had refused to continue on the previously agreed financial terms beyond this season, which is due to conclude this month.

The league and DAZN faced off in court over the contract, with the threat of financial crisis hanging over smaller clubs if the funds were not paid.

DAZN has released the French league operator from the exclusivity agreed under their contract, according to two people with knowledge of the matter.

Ligue de Football Professionnel, which runs the top two leagues in France, will talk to other potential broadcast partners in the coming weeks, the people said.

The league could find an alternative broadcaster or set up its own channel, an initiative that could ultimately be supported by DAZN. The company said earlier this week that it had proposed to invest €100mn in the league’s “channel project” over the first two years.

If DAZN pulls out of the contract completely and does not invest in the new channel, then it would have to pay a break fee to the league of around €100mn.

Broadcasting is a vital source of revenue to clubs, in addition to ticket sales and sponsorship arrangements, that enables them to attract and retain top players.

The French league, which includes Paris Saint-Germain and Olympique Marseille, has been in a state of near permanent crisis for the past five years. Its struggles go back to its decision to pick Spain’s Mediapro over long-standing French partner Canal+ in an auction in 2018, when overall media rights value jumped 60 per cent to €1.15bn a season.

But Mediapro stopped paying during the pandemic, leaving the league in the lurch. Canal+ refused to bid for the rights again, accusing the league of showing a “total lack of transparency”.

In 2022, with the league in need of capital to repair its finances, CVC Capital Partners invested €1.5bn. In return, the private equity firm was granted a stake in the commercial entity that markets the league’s broadcast rights.

That entity recently hired veteran French TV executive Nicolas de Tavernost, who was responsible for the recent talks with DAZN. His arrival has also raised hopes of mending relations with Canal+. Maxime Saada, who leads the French broadcaster, recently welcomed de Tavernost’s appointment.