The proposals said to be under consideration would be hugely disruptive, and expand the U.S. conflict with China far beyond current disputes over trade and technology. There are 156 Chinese firms listed on U.S. stock exchanges, representing a total market capitalization of more than $1 trillion, according to the U.S.-China Economic and Security Review Commission.

Cynics dismissed the idea the White House would resort to such drastic measures. Some argued Trump is just trying to change the subject in Washington, diverting attention away from charges that he tried to strong arm the Ukrainian president into digging up dirt on the son of a political rival. Others said Trump is looking for extra leverage as the U.S. and China head into a crucial phase in trade negotiations.

Both things may be true. Neither assures Trump won’t take action.

Bloomberg reports that: measures to disentangle the U.S. and Chinese financial system have been under study by Trump advisers for many months; the White House has been working with Sen. Marco Rubio, a Republican who has frequently criticized the Trump for not being tougher on China; specific proposals have been debated at multiple recent meetings including members of the Treasury Department as well as Trump’s National Economic Council and National Security Council. By day’s end, the New York Times, the Financial Times, and Reuters confirmed the broad outlines of the Bloomberg story.

U.S. stock markets tanked on the news. U.S.-listed Chinese companies, including tech leaders Alibaba Group, Tencent Holdings, JD.com, Baidu, and Nio were hit particularly hard.

It’s not clear what specific measures the administration contemplates. The Times reports that White House China hawks want to close “longstanding loopholes that have allowed Chinese companies with links to its government to take advantage of America’s financial rules to solicit funds from American investors without proper disclosure.”

Efforts to force Chinese companies off U.S. exchanges would invite legal challenge, and almost certainly provoke retaliation from China. Any U.S. capital crackdown on China would counter a decision by China earlier this month to remove caps on foreign purchases of domestic stocks and bonds.

One group that is unlikely to oppose calls for new restrictions on U.S. portfolio investments in China: congressional Democrats. If anything, they’ll compete to devise more radical measures.

More China news below.

Clay Chandler
– Clay.Chandler@Fortune.com
– @claychandler

Economy and Trade

Who said it better? Trump delivered a withering speech at the U.N. General Assembly, criticizing China’s trade and development practices and chastising the WTO for policies that allow China to declare developing nation status. The president also declared that he would not accept a “bad deal” to end the trade war. On Friday, China Foreign Minister Wang Yi responded during his own assembly address, warning tariffs could plunge the world into recession. Reuters

Slick. The Trump administration slapped sanctions on four Chinese shipping companies it accuses of trading with Iran, sending Asia oil traders into a frenzy as they distanced themselves from the targeted groups. China’s foreign ministry accused the U.S. of “bullying.” Bloomberg

Taking the plunge. Chinese foreign minister Wang Yi warned in blunt speech to the United Nation's Friday that tariffs and trade disputes will upset global industrial and supply chains, undermine the multilateral trade system and could "plunge the world into recession." Reuters

Innovation and Tech

Ant nest. Alibaba acquired a 33% stake in Ant Financial, the fintech unit Jack Ma controversially spun out of Alibaba Group in 2011. Alibaba first floated the idea of acquiring equity in Ant last year but regulators only just approved the purchase. The equity interest cancels Ant and Ali’s previous profit-sharing deal, where the fintech unit paid a 37.5% on profits to Alibaba. Analysts see the deal as a sign that Ant Financial is preparing for an IPO. TechNode

Blue Sky Coming? Chinese EV maker Nio — once among the many auto start-ups described as “China’s Tesla” — is careening towards a cliff. Revenues at the three year-old company fell 8% in the second quarter to $198 million; losses were 25% greater than in Q1, swelling to $478 million. The company is raising $200 million through bonds this week, but its share price has fallen around 37% over the last week to $1.96. Bloomberg

Making money. Facebook’s digicoin, Libra, will not stock the Chinese yuan in its currency basket. The exclusion could be a way to win favor with Facebook’s U.S. home market, where officials are wary of China’s growing economic influence. Also this week, the governor of China’s central bank commented for the first time on Beijing’s plans to launch a national cryptocurrency, but denied it would be released any time soon. Nikkei Asian Review

Tick-tock, TikTok. Recently, a flurry of reports speculated on whether TikTok, a popular video-sharing app owned by Beijing Bytedance, censors content across its international platform. Then The Guardian swooped in with the scoop and claimed to have a copy of the app’s content moderation guidelines, detailing how TikTok implements its Chinese-style censorship. Topics like Tiananmen Square and Tibetan independence are reportedly banned—but so are videos advocating independence for Northern Ireland. Bytedance says the document is out of date. The Guardian

In Case You Missed It

Carrie Lam: Yes, Hong Kong Does Have a Future NYT

For Xi, the Hong Kong Crisis is Personal WSJ

Gordon G. Chang: Hong Kong May Topple Communism WSJ

The $63 Billion ‘Phoenix’: Beijing Officially Opens the World’s Largest Airport Fortune

The man who changed Apple Week in China

Baidu to sell $1 billion of shares in travel website Ctrip Financial Times

Politics and Policy

Outbursts; no fireworks. This week, Hong Kong Chief Executive Carrie Lam held a “community dialogue” with 150 of Hong Kong’s disgruntled residents, picked from 20,000 applicants. In an emotional town hall event, Lam was grilled and chastised for 2 hours over her and the government’s failing to quell the unrest. Lam’s government has cancelled the annual fireworks display that commemorates China’s National Day on October 1, fearing greater unrest as protests continue to shake the city. VIPs invited to attend a flag raising ceremony on the day have been warned the party will be kept indoors. A series of pro- and anti-Beijing protests is planned  ahead of Tuesday, the 70th anniversary of the founding of the People’s Republic of China. South China Morning Post

Then there were few. Two Pacific island states — Kiribati and the Solomons — severed ties with Taiwan, swayed by Beijing’s superior economic might. One remarkable detail: Beijing agreed to continue a Taiwanese tradition of direct financing for Solomon Islands officials, which is rife with corruption. The number of Taiwan’s allies have now dwindled to just 15. Fortune

This edition of CEO Daily was edited by Eamon Barrett. Find previous editions here, and sign up for other Fortune newsletters here.