![]() In May, Reuters reported that Beijing was pressing audio platform Ximalaya to drop U.S. listing plans and opt for Hong Kong instead, with one source at the time citing Beijing’s concerns that U.S. ![]() regulators will potentially gain more access to audit documents of New York-listed Chinese companies.Īnalysts also note the tougher stance coincides with new U.S. regulations being rolled out that could see Chinese companies delisted if they do not comply with U.S. auditing rules.The idea that investors should avoid the Chinese market would have been unfathomable even a few months ago. The world’s second-biggest financial market after the U.S.-one the IMF expects to grow faster than almost any other major economy this year-looked like a surefire opportunity for investors up until Beijing started cracking down on Big Tech. ![]() The government has hamstrung some of its largest homegrown tech stars, restricting or even forbidding them from operating their most promising business lines.īut the prospect of China now being a no-go zone reflects just how much the regulatory campaign has spooked investors. Authorities suspended new sign-ups for Didi Global after the ride-hailing giant went public in the U.S. and is now reportedly looking to take the firm under state control. (Didi denies the report.) The government ordered Didi, shopping platform Meituan, and e-commerce giant Alibaba to rectify past misconduct that interfered with fair competition and hurt drivers and passengers. It banned its booming ed-tech industry from making profits and kneecapped video game makers like Tencent by restricting children’s screen time. It’s all in the name of limiting what the government sees as the companies’ monopolistic power-a perceived threat to Communist Party rule-and eliminating social inequality that can lead to public discontent. “Regulatory pressure can materialize out of nowhere.” “China envisages a heavier regulatory hand and views tech as a political threat,” said Matt Gertken, a strategist at BCA Research who focuses on geopolitical and macro risks. Through Wednesday’s close, the tech-dominated MSCI China Index has fallen 24.9% in the past six months from its February peak, compared to a rise of 9.3% for the MSCI All-Country World Index during the same period. ![]()
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