Removing Chinese companies from US stock exchanges contradicts the principles of capitalism and a widening gulf between the world's two largest economies risks diminishing the ability to handle a crisis like they were able to in 2008, former US Treasury Secretary Hank Paulson said. “When the next crisis comes — and a crisis will come, because financial crises are inevitable -- we will regret it if we lack mechanisms for the world’s first and second-largest economies to coordinate,” Mr Paulson who’s now chairman of the Paulson Institute, told Bloomberg’s New Economy Forum in Beijing on Thursday. He said calls by some in the US to delist Chinese companies from American stock indexes conflicted with the foundations of capitalism, and reducing ties between Beijing and Washington would weaken American standing and the position of New York as the capital of the financial world. "I believe we are now headed in precisely the wrong direction. We are headed for more decoupling not less," said Mr Paulson, adding that he was asked by former US mayor Michael Bloomberg to represent him at the event in his absence as he considers running in the 2020 presidential elections. "What concerns me most is whats happened to the flows of capital and technology over this past year. Both areas are vulnerable to significant negative headwinds in the form of policy changes under consideration in the US and China." “Decoupling China from US markets by delisting Chinese firms from US exchanges is a terrible idea,” he added. The trade rift has pulled down growth in trade volumes globally to just 1 per cent in the first half of this year — the weakest level since 2012. Business confidence has ebbed and the manufacturing sector has also taken a hit, which has pushed the world’s economic growth lower. The global economy is in a “synchronised slowdown” and projected to grow 3 per cent this year, its slowest expansion since the 2008 global financial crisis, as a result of protectionist policies and increased uncertainty related to trade and geopolitics, the International Monetary Fund (IMF) said last month. Trade conflicts could cost the global economy around $700 billion (Dh2.57 trillion), or 0.8 per cent of its output by 2020 as trade growth across the world comes to “a near standstill”, according to the IMF.