China’s Crackdowns on US-Listed China-Based Companies will Impact Their Stock Prices

WTO Says US Tariffs on China Goods Were in Violation of Trade Rules

In recent months, many of the most powerful companies in China such as Tencent, Alibaba, and Didi have been under the Chinese Government’s microscope. The reports show that almost all major companies are currently facing a lot of scrutiny from the Chinese Government.

From the looks of it, it is clear that the Chinese Government and regulators have vowed to take strict action against local companies. However, there is one major similarity in all these major companies based in China, which is that they are all listed in the US Stock Exchanges.

The reason behind the success and enlistment of these companies on the US Stock Exchanges is their promising outcomes and stock prices. If the Chinese regulatory authorities keep at it with their act and constant scrutiny on such firms, then things could become very alarming for these companies.

At present, these companies are running smoothly through the US Stock Exchanges. However, if China ends up taking strong action against all of these companies. Then the US Stock Exchanges would see over $2 trillion worth of market capitalization move away from their platforms.

The investors in the United States and all over the world benefiting from these companies through exchanges would not be losing a lot.

At present, a vast majority of the China-based companies listed on the US Stock Exchanges are from the tech sector. The Chinese State Council has recently made an announcement in regards to the listing of domestic companies in overseas stock exchanges.

The announcement by the Chinese State Council was made on Tuesday, July 6, 2021. In the announcement, the council revealed that it is currently in the process of updating rules of enlistment of domestic companies in overseas stock exchanges.

Furthermore, the council will also be working on the exchange of information that can be executed cross-border between these companies and the stock exchanges.

The Chinese Government is now paying too much attention and is very vigilant towards the cybersecurity measures adopted by these companies.

The data shows that at present, there are at least 248 companies based in China that are listed through the US Stock Exchanges. The combined market capitalization of these companies is over $2.1 trillion. If these companies end up leaving the US Stock Exchanges, they may end up causing a huge impact on the investors in the United States.

Given the current circumstances and the feud between China and the United States, many China-based companies listed on the US Exchanges have started moving to Hong Kong Stock Exchange.

This means that the Chinese companies have already started preparing themselves for migrating to other exchanges.

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