Nation prepares for return of US-listed tech companies

Chinese companies listed in the US have started seeking listings in Hong Kong and the Chinese mainland and will speed up doing so as ChinaUS relations sour, while Chinese regulators are likely to roll out reforms to accelerate the trend, financial experts said.

The prediction came after a representative of the China Securities Regulatory Commission criticized the US for “politicizing securities management,” as the US Senate passed legislation last week that could restrict Chinese companies from listing on American exchanges or raising money from US investors. The move could trigger US-listed Chinese companies including tech giants like NetEase and Baidu to list elsewhere.

Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, said that the new US legislation is “ill-willed and malicious” as it particularly targets Chinese companies. “From Huawei to USlisted Chinese companies, the US is extending its attack on Chinese firms. It shows that the trade war between China and the US might escalate.”

Rukim Kuang, founder of Lens Company Research, said that if the US actually moves to disrupt trading of Chinese company shares on US bourses, US investors will bear the brunt of that decision as they account for the majority of stock traders behind companies like Alibaba.

Chinese companies are rendering the risks and are expected to take actions. Baidu is mulling a secondary listing in Hong Kong. Reports also indicate that Netease and JD.com aim to list shares in Hong Kong too.

Stock exchanges in Hong Kong and the mainland have been preparations. The Hong Kong stock exchange has lowered its IPO threshold while launching reforms to allow special equity structures to list on the market, while mainland boards like the science and technology innovation board accepted IPO applications from companies that temporarily are not making money.