Do people exposed to ADR Chinese-whether it is a CEO of a Chinese company listed in the United States, or a strategist in shares dealing with the Chinese market-are now all taking a question: will the United States really launch Chinese companies from its scholarships?
Some of the largest Chinese companies are negotiated in the United States, notably JD.com (n ° 47 on the Global 500 fortune), Alibaba (n ° 70) and PDD Holdings (n ° 442). But these giants and many much smaller companies could have their existence as a business negotiated in the United States threatened by a trade war related against Beijing launched by US President Donald Trump.
Last week, several Republican members of the Congress, including representative John Moolenaar, president of the restricted committee of the Chinese Communist Party Chamber, Recently written named Paul Atkins, president of the Commission on Securities and Exchange, “expresses the serious concerns concerning the continuous presence of Chinese companies on American scholarships”.
In a letter reported by THE Financial time,, The legislators underlined the Chinese companies listed in the United States, large and small, of giants like Alibaba and JD.com to small startups such as the brand EV Xpeng and the provider of autonomous car Pony.a.
'Everything is on the table'
Radiation concerns have increased since the end of February, when Trump has relaunched the threat of launching Chinese companies in American exchanges in his “Investment Plan in America”. In his memo, Trump ordered managers to determine whether Chinese companies respected American audit standards and investigate the structures that these companies use to list on foreign exchanges.
Since then, administration officials have refused to exclude measures against Chinese companies listed in the United States, the Treasury Secretary Scott Bessent noting in a television interview in mid-April that “Everything is on the table. “”
“The threat increases significantly,” says Sandeep Rao, a researcher at the actions infection.
The Nasdaq Golden Dragon China index, which follows Chinese companies listed in the United States, has been down around 7% since the “Liberation Day”. In comparison, the Hong Kong Hang Seng Tech index, which follows technological companies, has exchanged in the Chinese city (including some which also negotiate in the United States) is down 4.6% over the same period.
Chinese companies have long been turning to the United States's deep and liquid markets to raise capital. Alibaba's IPO in the New York Stock Exchange in 2014 has collected $ 25 billion, the largest IPO in the world at the time, and only replaced by the list of Aramco Saudi in 2019 in Riyadh.
At the end of March, 286 Chinese companies are registered with American exchanges, with a total market value of 1.1 billion of dollars, according to the exchange data cited by the Morning post in southern China.
However, American investors have groaned bad audit standards among Chinese companies. Technically, companies listed in the United States must open their books to American regulators, but Chinese officials often prohibit such access citing national security. The revelation in 2020 according to which the Chinese coffee chain Luckin Coffee had inflated its sales was the last straw for the Congress, which adopted the law on foreign companies which ordered Chinese companies to grant access to American regulators or to risk being thrown from American exchanges.
After years of negotiations, China in 2022 agreed to allow regulators to re -examine audit documents in the Chinese city of Hong Kong, lifting the threat of threat and soothing investors.
However, the damage had already been caused, while the Chinese companies listed in the United States began to explore the secondary lists in Hong Kong. Last year, Alibaba improved his Hong Kong list to a main registration, allowing the Chinese Electronic Commerce Company to draw Chinese investors from the continent via the Connect program south of the city.
Some investors “have gone from the US Ticker to the Hong Kong Ticker due to the threat of radiation,” said Rao.
Hong Kong could be a winner
In mid-April, Goldman Sachs estimated that American institutional investors hold around $ 830 billion in actions in Chinese companies, spread over the Chinese markets on the continent, Hong Kong and the United States. About 250 billion dollars are in the Chinese ADR.
However, “the assets of actions by foreigners, in particular the American holders, fell significantly compared to the place where we were five years ago,” said Cameron Chui, strategist in Asia Equity for the private bank of JPMorgan, during a briefing on Wednesday from journalists when asked for the possibility of radiation. “The risk has certainly been significantly reduced.”
Rao notes that American investors may always be able to continue to negotiate Chinese companies even if they are struck off – it would simply be on the less protected free sale market. Tencent, one of the largest Chinese technological companies, has its main registration in Hong Kong, but is also negotiated on the United States market.
Meanwhile, Chinese companies are already whispering other options. In a conversation with journalists on the sidelines of the Shanghai Auto Show, Pony.ai CEO, James Peng, said a secondary registration in Hong Kong was possibleAlthough stated that the startup focuses on the release of its next generation of vehicles.
Geely Auto is Also taking Its EV brand listed in the United States Zeekr Private, only a year after its New York IPO, to rationalize the operations of the Chinese car giant and improve profitability.
In his report to mid-April, Goldman Sachs underlined 27 Chinese companies listed in the United States which will probably be eligible for a registration in Hong Kong (whether it is a secondary or primary list), including the PDD, the Futu detail trading platform and the Digital Logistics Platform Complete.
But some Chinese companies brave geopolitics to continue an American list. Chagee, a raised Chinese tea string $ 411 million In a US IPO, its debut on the Nasdaq on April 17.
Hong Kong looks like a more attractive place – or, at least, less bad – to exchange actions. A main registration in the city opens up the possibility that continental Chinese investors negotiate the actions of the company. The flows in southern direction (that is to say from continental China to Hong Kong) have Has auglete in recent monthsAs the Chinese investors of the continent are distributed in the Boom of AI represented by companies like Alibaba and Semiconductor International Manufacturing Corporation.
“It is quite wise to have, at the very least, a secondary list in Hong Kong if you are a Chinese company listed in the United States,” said Rao.
The city goes through a renewal of Introduction on the stock market, because the Chinese companies of the continent now hope to exploit world capital thanks to a list “abroad”. Last November, an IPO of $ 4 billion by MIDEA, the world's largest manufacturer of household appliances, launched things; Mixue, a chain of ice cream with more points of sale than McDonald's, followed in March.
Hong Kong is expecting at least two other successful stocks in the coming months. CATL, the main battery supplier for Tesla, hopes Raise $ 5 billion in Hong Kong in the near future. (JPMorgan and Bank of America help the IPO, which has Attracted control of the congress.) Chinese car manufacturer Chery Auto is also prepare For a registration in Hong Kong to raise $ 1.5 billion.
But Hong Kong is not a perfect replacement for New York. “There are no positive points. Liquidity in Hong Kong is not the same as in the United States,” said CHUI on Wednesday.
This story was initially presented on Fortune.com
