Macroscope | Why delisting from US exchanges is the next big opportunity for Chinese firms
- As US-listed Chinese firms move to Hong Kong, savvy international investors and their money are likely to follow
- The way forward for these firms is to see that providing investors with transparency and accountability is essential to growth and brings many benefits
However, the focus should not be on who will prevail in the dispute between Chinese and American authorities over public company compliance with disclosure standards and financial audits.
Short of achieving a harmonised approach to transnational audit regulation – a sensible thing to do but not likely in the foreseeable future given the political divide – we can expect the dispute to remain unresolved for some time.
Rather, many of the more sophisticated cross-border investors know these companies are good long-term holdings. This is particularly so as they represent sectors with significant growth potential – such as electric vehicles and e-commerce – that promise expansion into new global markets.
As these departing companies list in Hong Kong, the money is likely to follow. When they listed in the United States, investors from Britain and Europe took sizeable positions.