Editorial | ‘Homecoming’ has its advantages for China
- A deep pool of household savings will encourage more Chinese companies to tap the domestic market, a virtuous circle adding depths to Chinese capital markets while making the US less attractive
In the United States, it is considered part of “decoupling”. In China, it is described as “homecoming”.
China Telecom, the state-owned giant, will debut this month in Shanghai in what is expected to be the country’s biggest share listing in a decade. The company was ejected from the New York Stock Exchange along with state-run peers China Mobile and China Unicom in January to comply with an executive order signed by former US president Donald Trump over their alleged ties to the Chinese military.
Beijing is keen to use China’s own capital markets to shield strategic firms from a hostile US. But since China Telecom is already listed in Hong Kong, the Shanghai Stock Exchange is the only logical choice.
Paradoxically, pressure from regulators in both countries means “homecoming” will be going full steam ahead. US regulators will set new disclosure rules for Chinese firms seeking American initial public offerings (IPOs) and have threatened to delist those not meeting their accounting standards.
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