Those who are exposed to the Chinese AdR-whether the CEO of a Chinese company listed in the United States, or a strategic stock expert deal with the China market-all now think about one question: Will the United States really expel Chinese companies from shares?
Some of the largest companies in China are trading in the United States, including JD.com (No. 47 on Fortune Global 500Alibaba (No. 70) and PDD Holdings (No. 442). But these giants and many smaller companies can have their existence as they threaten the companies traded in the United States through a commercial war that was revived against Beijing, which was launched by US President Donald Trump.
Last week, many members of the Republican Congress, including actor John Molinaar, Chairman of the Mukhtar Committee of the Chinese Communist Party, Recently written Chairman of the Securities and Stock Exchange Committee, Paul Atkins, to “express extreme concern about the continuous presence of Chinese companies on US stock exchanges.”
In a message he informed the Financial timesand Legislators referred to Chinese companies listed in the United States, large and small, from giants such as Alibaba and JD.com to smaller startups such as EV Brand Xpeng and self -driving car provider pony.aii.
“Everything on the table”
Fears have grown about the deletion Since late FebruaryWhen Trump revived the threat of kicking Chinese companies off American exchanges in the “first investment plan in America”. In his note, Trump ordered officials to determine whether Chinese companies support American audit standards Investigation of structures These companies are used for foreign exchange stairs.
Since then, administration officials have refused to exclude action against Chinese companies listed in the United States, as Treasury Secretary Scott Pessant indicated in a television interview in mid -April.Everything is on the table“
“The threat is growing in a big way,” says Sandep Rao, a researcher at the Capeed Financial Company.
The Nasdaq Golden dragon index, China, which tracks Chinese companies listed in the United States, has decreased by about 7 % since “Tahrir Day”. In comparison, the Hong Seng Tech Index in Hong Kong, which tracks the technology companies circulating in the Chinese city (including some who also trade in the United States) decreased by 4.6 % during the same period.
Chinese companies have long turned into deep and liquid markets in the United States to raise capital. Public subscription to the New York Stock Exchange in 2014 Rapid 25 billion dollarsThe largest public subscription in the world at the time, and it is replaced only by the Aramco list for the year 2019 Saudi Arabia in RIYAADH.
As of the end of March, 286 Chinese companies are included in the American stock exchanges, with a total market value of $ 1.1 trillion, according to the exchange data they mentioned Post morning South China.
However, American investors have complained about bad audit standards among Chinese companies. Technically, companies listed in the United States need to open their books to American organizers, but Chinese officials often prevent this access to national security. In 2020, the revelation was that the Chinese coffee chain, Lukeen, coffee, had the last straw for the Congress, which passed the law of responsibility for foreign companies that Chinese companies order To grant access to American organizers or get rid of the risk of American exchanges.
After years of negotiations, China agreed in 2022 to allow organizers to review audit documents Chinese Hong KongRaising the abnormal threat and calming investors.
However, the damage has already occurred, as Chinese companies listed in the United States began exploring secondary lists in Hong Kong. Last year, Ali Baba It upgraded the Hong Kong list To a preliminary list, allowing the Chinese e -commerce company to benefit from Chinese investors on the mainland through the calling outline in the city.
“Some investors have turned” from the United States’ constipation to the Hong Kong index due to an abnormal threat, “says Rao.
Hong Kong may be a winner
In mid -April, Goldman Sachs estimated that institutional investors in the United States have about $ 830 billion of stocks in Chinese companies, and spread across the Chinese market, Hong Kong and the United States. About $ 250 billion of this in Chinese AdRS.
However, “the shareholders of the stocks by foreigners, especially the holders of the United States, have fallen useful to where we were five years ago,” said Cameron Choi, a strategic Asia strategy expert at JPMorgan Private Bank, during a press conference on Wednesday for reporters when they were asked about the possibility of its wreck. “The risks have definitely reduced.”
Rao notes that American investors may still be able to continue trading in Chinese companies even if they are deleted – it will only be in the less protection OTC market. Tenstant, one of the largest technology companies in China, has a major list in Hong Kong, but also trading in the OTC market in the United States.
Meanwhile, Chinese companies are already complaining about other options. In a conversation with correspondents on the sidelines of the Shanghai Motor Show, the CEO of Pony.ai James Ping said a secondary list in Hong Kong was possibleAlthough confirmation that the startup was focusing on the launch of its next generation of vehicles.
Geely Auto is Also taking Its brand EV is listed in the United States Zeekr Private, only One year After the public subscription in New York, to simplify the operations of the Chinese car giant and improve profitability.
In its report in mid -April, Goldman Sachs highlighted 27 Chinese companies listed in the United States that are likely to be qualified to obtain the Hong Kong menu (whether it is a secondary or basic list), including PDD, FUTU retail platform, and alliance of the full truck platform for digital logistics.
But some Chinese companies block political geography to follow an American list. Chinese tea chain, raised 411 million dollars In the American public subscription, for the first time on the Nasdaq Stock Exchange on April 17.
Hong Kong looks like a more attractive place – or at least, worse – for commercial stocks. A basic list in the city opens the possibility of trading Chinese investors on the mainland of the company’s shares. South flows (i.e. from China, the main righteousness to Hong Kong) It has risen in recent monthsAs Chinese investor barrel on the mainland Artificial intelligence boom Representative of companies such as Ali Baba and International conductor manufacturing company.
“It is completely logical, at least, a secondary list in Hong Kong if you are a Chinese company listed in the United States,” says Rao.
The city is going to revive the public subscription, as Chinese companies hope for the main mainland now to benefit from the global capital through a “external” list. Last November, a 4 billion dollars in subscription by MideaThe largest home appliance maker, things started; Mix, ice cream chain with more outlets than McDonald’s, Follow in March.
Hong Kong expect at least two subscriptions to subscriptions in the coming months. Catl, the main resource of the batteries to Tesla, hope for it A collection of 5 billion dollars In Hong Kong in the near future. (Jpmorgan and Bank of America help in the public subscription, which he has I attracted the audit of Congress.Auto Chinese auto industry company Prepare also Hong Kong List to raise $ 1.5 billion.
But Hong Kong is not an ideal alternative to New York. “There are no positives from this. Liquidity in Hong Kong is not the same as in the United States,” Choi said on Wednesday.
This story was originally shown on Fortune.com
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