WSJ: Chinese Companies Return Amid US Regulatory Delisting Concerns... Chinese Government to Foster Financial Hub
In November, 8 Companies Including Alibaba Ant Group to Raise Funds in Hong Kong and Shanghai
[Asia Economy Beijing=Special Correspondent Cho Young-shin] The Wall Street Journal (WSJ) reported on the 27th (local time) that major Chinese companies are pursuing additional listings in Hong Kong and Shanghai to attract overseas capital.
The Wall Street Journal explained that as U.S. regulations tightened due to U.S.-China conflicts, Chinese companies are preparing additional listings in their home country.
According to the Wall Street Journal, eight Chinese companies listed in New York plan to raise a total of $25.5 billion (approximately 29.9 trillion KRW) through additional listings in Hong Kong after November.
Included are Ant Group, the financial group under Alibaba Group, China's largest e-commerce company with a market capitalization of $1 trillion, and Yum China Holdings, the largest restaurant operator running KFC chains in China. Additionally, JD.com, ZTO Express, Huazhu, Baojun, and NetEase are preparing additional listings in mainland China.
The Wall Street Journal explained that Chinese companies are pursuing additional listings in Hong Kong and Shanghai due to concerns that they could be delisted from the U.S. in the worst-case scenario. This is a desperate measure to build a kind of safety net.
The Wall Street Journal stated that Chinese companies listed in the U.S. are moving to the Hong Kong and Shanghai stock exchanges, voluntarily or involuntarily. This implies concerns about possible delisting due to U.S. government regulations and that the Chinese government is attracting these companies to the Hong Kong and Shanghai stock exchanges.
In this regard, George Magnus, a researcher at the China Centre of Oxford University, said, "The return of Chinese companies to their home country is part of the financial war between the U.S. and China." He added that politics is a movement to separate financial systems.
The Wall Street Journal further explained that the additional listings of Chinese companies in their home country align with the Chinese leadership's plan to develop Hong Kong and Shanghai as major financial hubs.
Tucker Highfield, co-head of Asia-Pacific Equity Capital Markets at Bank of America, predicted, "It is highly likely that more Chinese technology companies will list in Hong Kong or Shanghai rather than the U.S."
The Wall Street Journal added that last year, 180 companies were listed on the Shanghai Stock Exchange Science and Technology Innovation Board, known as the Chinese version of Nasdaq, with a total stock value of $106 billion.
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