Not only did company officials resist the usual routine of ringing the opening bell. One early hint of trouble was that the company played down the blockbuster listing. began trading on the New York Stock Exchange on June 30, auspiciously one day ahead of the CCP centennial celebration. It is now more likely to be Chinese regulators themselves who plug the spigot.
Until this week, the greatest concern for investors was that new US accounting rules would stymie that flow. Dealogic shows that Chinese companies have raised $26 billion from new US listings in 20. The ripples could be long-lasting and far-reaching for the lucrative relations between China and Wall Street. The story that triggered this week’s stir was the $4.4 billion US initial public offering (IPO) of the world’s largest ride-hailing and food delivery service, Didi. investors shouldn’t be trusting their futures to China Inc.”
“Wall Street must now acknowledge that the risk of investing in these companies can’t be known, much less disclosed,” writes Josh Rogin in the Washington Post. Foreign investors, only too happy to accept risk for the long-proven upside of Chinese stocks, now must factor in a growing risk premium as Xi tightens the screws. What is clear is that Chinese President Xi Jinping, during this month’s celebration of the one hundredth anniversary of the CCP, has sent an unmistakable message at home and abroad of who is in charge.Ĭhinese domestic companies, particularly of the tech and data-rich variety, will be more likely to shun Western capital markets and adhere to party preferences. Graph courtesy of the Rhodium Group and Atlantic Council GeoEconomics Center’s joint China Pathfinder Project It’s an immeasurable loss of economic dynamism. The answer, according to a rough calculation from a new partnership formed by the Rhodium Group and the Atlantic Council, is as much as $45 trillion in new capital flows into and out of China by 2030, if the party were willing to pursue serious reform. RoboSense, a Chinese developer of sensor technologies used in self-driving cars, decided to list in Hong Kong instead, following others like Lalamove and Xiaohongshu.This was a clarifying week for global investors-or for anyone concerned about authoritarian capitalism-of just how much the Chinese Communist Party (CCP) would be willing to pay to ensure its dominance. IPO plans, including health-care firm LinkDoc Technology Ltd., bike-sharing company Hello Inc. Meanwhile, other companies were said to have shelved or delayed their U.S. stock will be convertible into freely tradable shares on another internationally recognized stock exchange. 2 that it will file for a delisting of its American depositary shares from the New York Stock Exchange and start work on a Hong Kong share sale. Shareholders sued the company, as well as its directors and underwriters, claiming Didi failed to disclose talks it was having with Chinese authorities about its compliance with cybersecurity laws. Didi’s share price fell as much as 25% on the first trading day after that.
Days after Didi’s IPO, China’s cybersecurity regulator told app stores to remove the company’s app, citing serious violations on the collection and usage of personal information.
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