Delisting Chinese stocks in the US could have a 'far-reaching impact'

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Pulling out US investments from China could hurt America more

in its benchmark bond index early next year.

If such U.S. investments were banned, American investors would miss out on what many analysts expect will be a long-term growth story. In addition to encouraging greater foreign participation in its capital markets, China is trying to increase foreign access to its financial services industry. Some announcements in the last 18 months include allowing a foreign bank to take majority ownership of its local securities joint venture.

"There's a kernel of legitimacy in this," said James Early, CEO of investment research firm Stansberry China. He pointed out that many Chinese companies that were able to access U.S. public markets around 2010 received no consequences for fraudulent behavior.

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