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China Signals End to $2 Trillion U.S. Listings Juggernaut
Yahoo Finance ^ | July 19, 2021 | Sofia Horta e Costa and Richard Frost

Posted on 07/19/2021 12:46:50 PM PDT by BeauBo

For two decades Chinese tech firms have flocked to the U.S. stock market, drawn by a friendly regulatory environment and a vast pool of capital eager to invest in one of the world’s fastest-growing economies.

Now, the juggernaut behind hundreds of companies worth $2 trillion appears stopped in its tracks.

Beijing’s July 10 announcement that almost all businesses trying to go public in another country will require approval from a newly empowered cybersecurity regulator amounts to a death knell for Chinese initial public offerings in the U.S...

“It’s unlikely there will be any U.S.-listed Chinese companies in five to 10 years, other than perhaps a few big ones with secondary listings,” said Paul Gillis...

A gauge of U.S.-traded Chinese stocks has dropped 30% from its recent high...

During the latter part of former President Donald Trump’s presidency, Trump introduced tough new rules that mean Chinese firms may be kicked off exchanges in a few years’ time if they refuse to hand over financial information to U.S. regulators...

Beijing’s move to regulate overseas IPOs coincides with stricter controls over China’s technology firms, many of which have near-monopolies in their fields and vast pools of user data. This campaign to rein in the tech industry has accelerated in recent months as Xi seeks to limit the influence of the billionaires who control these firms...

Hong Kong is increasingly looking like a viable alternative (for Mainland firms to list)... But the outlook for Hong Kong’s role as a global financial center is looking more uncertain...

It seems that the two-decade era that saw China’s most successful and powerful private firms list in the U.S. is coming to a close. The message from Beijing is clear: the Communist Party will have the final say on pretty much everything, including IPOs.

(Excerpt) Read more at finance.yahoo.com ...


TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; News/Current Events
KEYWORDS: china; investment; market; stock; stocks
The Communist's desire to exert complete control over Chinese companies, may help achieve some of the economic de-coupling that is in America's interest.

Those Chinese companies have been allowed exceptions, that enabled them to get away with massive systemic fraud in the US stock markets. They are able to sell their shares for much more than they are really worth, and get real hard Western currency for them.

President Trump got new rules in place, to make communist Chinese firms adhere to same financial disclosure and auditing rules as other firms. Those firms often have undisclosed mountains of bad debt, and fraudulently inflated assets and earnings.

Now in addition to push from America to remove their companies from US stock exchanges, there seems to be a strong pull from the ChiComs, to drag their businesses back under tighter (total) ChiCom control.

Good riddance to bad rubbish.

1 posted on 07/19/2021 12:46:50 PM PDT by BeauBo
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To: BeauBo

I don’t follow the financial markets very closely, so this comes as a surprise to me.


2 posted on 07/19/2021 12:53:09 PM PDT by Kevmo (some things may be true even if Donald Trump said them. ~Jonathan Karl)
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To: BeauBo

It was always technically illegal for Chinese companies to list in the USA, thus giving “ownership” to foreigners

The work-around, listing Caymen or Virgin Island shell companies with a “claim” on Chinese company earnings was always a scam - ignored by the Chinese Government and perpetrated by Wall Street Banks and the owners of the Chinese companies.


3 posted on 07/19/2021 12:55:53 PM PDT by PGR88
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To: PGR88

“It was always technically illegal for Chinese companies to list in the USA, thus giving “ownership” to foreigners”

Yes, they discuss that some in the article, and the methods that were used to get around that.

Essentially, the communists allowed it, to get at the real money (hard currencies) that they needed, but now it looks like they are pulling the reins in hard.

It may be their domestic political desire for control (they don’t want any more uppity business tycoons expressing their own policy opinions in public), or it may be them adapting to the reality of the new rules put in place under President Trump. Probably some of both.

It looks like a pretty big shift. It follows other shifts in recent years, where the communist Party under Xi has exerted stronger direct control over big companies. So it seems to fit a pattern.


4 posted on 07/19/2021 1:13:49 PM PDT by BeauBo
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To: PGR88

Yikes! What’s going to happen to all of my Alibaba stock??


5 posted on 07/19/2021 2:16:39 PM PDT by BipolarBob (You may love gravity but gravity does not love you back.)
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To: BeauBo

Xi seeks to limit the influence of the billionaires who control these firms...


Because nobody can be wealthier, more powerful, more influential, be a better role model than the CCP and Chairman Xi


6 posted on 07/19/2021 2:17:19 PM PDT by PIF (They came for me and mine ... now its your turn)
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To: BipolarBob

Yikes! What’s going to happen to all of my Alibaba stock??


T A N K


7 posted on 07/19/2021 2:18:23 PM PDT by PIF (They came for me and mine ... now its your turn)
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To: PIF

NOOOO!!!


8 posted on 07/19/2021 2:21:17 PM PDT by BipolarBob (Send lawyers, guns and money. Dad, help me out of this.)
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To: BipolarBob

Alibaba, where you can buy literally anything and mostly knockoffs, will be wholly owned subsidiary of the CCP, as will every other large Chinese based company.


9 posted on 07/19/2021 2:33:11 PM PDT by PIF (They came for me and mine ... now its your turn)
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To: BeauBo

“ Good riddance to bad rubbish. ”

Worth repeating.


10 posted on 07/19/2021 3:56:18 PM PDT by jdsteel ("A Republic, Madam, if you can keep it." Sorry Ben, looks like we blew it.)
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