The threat to kick China out of U.S. exchanges is growing, and Hong Kong stands to benefit

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 500), Alibaba (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, head of the Chinese Communist Party’s selection committee, the Chairman of the Securities and Stock Exchange Committee recently, “Paul Atkins”, recently wrote to “express extreme concern about the constant presence of Chinese companies on American stock exchanges.”

In a message he informed 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 about deletion have grown since late February, when Trump has 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 us the criteria for scrutinizing and investigating the structures that these companies use to include foreign exchanges.

Since then, administration officials refused to exclude action against Chinese companies listed in the United States, as Treasury Secretary Scott Bessin indicated in a television interview in mid -April that “everything is on the table.”

“The threat is growing in a big way,” said 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. Collecting subscription subscriptions in New York on the New York Stock Exchange in 2014 $ 25 billion, and the largest subscriptions in the world at that time, and only was replaced by the ARAMCO list of 2019 Saudi Arabia in his Rio.

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 that the Chinese coffee chain Lukin coffee had swallowed its sales was the last straw for Congress, which passed a law responsible for foreign companies that ordered Chinese companies to grant American organizers or risk throwing American stock exchanges.

After years of negotiations, China agreed in 2022 to allow us to review the audit documents in the Chinese city of Hong Kong, and raised the calming 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, Alibaba 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 communication scheme south of 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 Bing In Hong Kong’s secondary list was possible, although the startup confirmation was focused on the release of the next generation of vehicles.

Geely Auto also takes the private Zekr brand listed in the United States, just one year after the 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. Chagee, a Chinese tea series, raised $ 411 million in US 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. Influening flows in the south (i.e. from China from the mainland to Hong Kong) has risen in recent months, where Chinese investors have raised the main mainland in the mutation of artificial intelligence represented by companies such as Alibaba and Seiconductor International Manufacturing Corporation.

“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, the public subscription worth $ 4 billion from MEDEA, the world’s largest home appliance manufacturer, launched matters; Mixue, an ice cream chain with more ports than McDonald’s, followed by March.

Hong Kong expect at least two subscriptions to subscriptions in the coming months. Catl, the main supplier of Tesla batteries, hopes to raise $ 5 billion in Hong Kong in the near future. (JPMorgan and Bank of America help in the public subscription, which has attracted the audit in Congress.) The Chri Auto car is also preparing to get the 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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2025-05-10 03:00:00