Hong Kong has been caught up in the geopolitical rivalry between the United States and China. On the one hand, that may boost the city’s status as a leading venue for global initial public offerings, as more Chinese and Hong Kong companies have no choice but to seek domestic listings. On the other, America’s economic warfare can still cause havoc. The decision of SenseTime Group to postpone its US$768 million IPO in Hong Kong is a case in point. The pioneering artificial intelligence specialist was among eight Chinese companies blacklisted by the US Treasury Department. It must be news to the group of Chinese University of Hong Kong scientists who started the company to learn that they are violating human rights in Xinjiang ; likewise Shenzhen-based drone-maker DJI Technology. SenseTime is expected to revive its IPO as early as next week. The blacklisting bars US investors from taking financial stakes in the targeted companies. Despite the flimsy excuse of human rights sanctions, it looks more like economic coercion against Chinese interests, especially in the hi-tech field. It comes in the wake of a new US law barring imports from Xinjiang because of disputed claims about forced labour and human rights violations against the Uygur minority. New accounting standards targeting Chinese companies and executive orders dating back to Donald Trump are already making the US inhospitable to Chinese companies seeking to raise capital. Meanwhile, Chinese regulators have stepped up scrutiny of data-rich companies and discouraged overseas listings. US sanctions DJI, AI firms over alleged Xinjiang human rights abuses After its disastrous debut in New York this summer, ride-hailing giant Didi Chuxing will seek a secondary listing in Hong Kong and then delist from the US. That development has, apparently, given tycoon Richard Li Tzar-kai pause, as he has abandoned a New York listing plan for FWD Group, the Hong Kong-based insurer, in order to sell shares on the local exchange. Li is likely to have considered the geopolitical risks and concluded they are not worth the trouble. But while Hong Kong and its cousin exchanges on the mainland will benefit from such a “homecoming”, there is no denying the valuation of companies, including some blockbuster listings, may be affected if US investors with deep pockets cannot take up stakes in them. That, of course, cuts both ways. Anti-China hawks in Washington may rue the day when they cut off Wall Street from its long and lucrative trade of taking fast-growing Chinese companies public and see US investors lose out if Hong Kong becomes the prime offshore listing choice for China’s hottest start-ups. In US politics, the pendulum always swings back. In the meantime, Hong Kong must fortify its position as a financial hub with no end in sight of US hostilities.