The American government is threatening to ban “corporate China” from the U.S. stock market, delisting hundreds of Chinese companies. At the same time, lots more Chinese firms are rushing to go public – not in Shenzhen, not in Shanghai, but in New York.
The U.S. government is threatening to delist Chinese companies that do not meet U.S. accounting standards, but mainland firms are rushing to offer their shares on New York exchanges, sometimes in blockbuster deals. Despite the threat and rising U.S.-China tensions, the allure of a valuation on the world’s deepest stock market makes the risk of eventual delisting manageable, while financial-technology companies find the regulatory burden of a U.S. listing lighter than that in mainland China or Hong Kong.
The U.S. remains a magnet for initial public offerings of Chinese technology companies, despite rising political, trade and regulatory tensions between the world’s two largest economies. More than 20 companies from China have gone public so far this year on the Nasdaq Stock Market or New York Stock Exchange, raising $4 billion in total, according to Dealogic data.