On Dec. 2, the U.S. Securities and Exchange Commission announced that Chinese companies listed on U.S. stock exchanges are required to indicate whether they are owned or controlled by government agencies. At the same time, it is necessary to provide audit evidence.
Some analysts say this could cause more than 200 Chinese companies to delist and cost Wall Street a considerable sum.
The latest data from the “World Federation of Exchanges” shows that the total market value of all Chinese companies listed in the United States has exceeded $2 trillion.
On the contrary, some experts point out that there would be no real impact on the U.S. economy and finances even if all Chinese companies were delisted.
Derek Scissors, a senior research fellow at the American Enterprise Institute, said that even if all Chinese listed companies pulled out of Wall Street, it would not significantly impact the economy and American financial system.
The market value of Chinese companies listed in the United States may not reach $2 trillion. Moreover, listed Chinese companies are not crucial to the U.S. economy and not critical to the U.S. Financial Industry. The U.S. can invest in the same company in the Hong Kong Market.
The delisting of Chinese companies will only have a significant impact on the fees charged by the U.S. stock market. But these stock exchanges have been doing very well for many years, so they can bear these losses.
Senior trade and economic analyst Alan Tonelson said that because the total market capitalization of the U.S. stock market is approaching $49 trillion. So even if all Chinese companies were to delist, there would be no significant or long-term damage.
The delisting of Chinese companies will eventually strengthen the financial underpinnings of the U.S. market because much of the value of Chinese companies can be based on fraudulent financial statements.
On Dec. 3, Chinese online ride-sharing giant Didi announced its delisting from the New York Stock Exchange and re-listing in the Hong Kong Stock market.
Observers say that the era of large Chinese companies coming to the U.S. to raise funds may be over.
According to SOH media, the Chinese Communist Party (CCP) has been developing its stock market in recent years to reduce its dependence on the U.S. capital market.
On Nov. 15, the Beijing Stock Exchange officially opened for trading. However, the transaction is not transparent, and the investment risk is high due to irrational policies from the CCP.