The threat to kick China out of U.S. exchanges is growing, and Hong Kong stands to benefit

Those exposed to Chinese ADRS: Is it an executive director of a Chinese company listed in the United States, or a joint-stock strategy dealing with the Chinese market, now everyone considered one question?

China’s largest companies trade in the US including JD.com (No. 47 FORTUNE GLOBAL 500), Alibaba (No. 70) եւ PDD HOLDINGS (No. 442). But these giants and many smaller companies could have their existence as US trading companies that threaten the trading war against Beijing, which started by US President Donald Trump.

Last week, a number of republican members of the Congress, including representative John Mulenger, Committee of the Chief of President of the Chinese Communist Party, wrote recently designated Paul Atkins, chairman of the Securities and Exchange Commission, “expresses serious concern over the continued presence of Chinese companies on US stock exchanges.”

In a reported letter is Financial Times:To be in style Legislators pointed out to Chinese companies listed in the United States, large and small, Alibaba and JD.com, to smaller newly creates, such as EV brand XPENG and self-development cars.

“Everything is on the table”

The worries about psychiatry have increased February at the end of FebruaryWhen Trump revived Chinese companies US exchanges in his “first American investment plan”. In his tip, Trump ordered the officials to determine that Chinese companies support the US audit standards and Explore structures These firms use a list of external exchanges.

Since then, the administration officials have refused to exclude the US-listed actions against the United States, noting the treasury secretary in Scott Baseen that “Everything is on the table“

“The threat is growing in a significant way,” says Sandeep Rao, a researcher for leverage shares.

NASDAQ GOLDEN DRAGE CHINA INDEPENSES Following Chinese companies listed in the United States, decreases “Liberation Day”. For comparison, Hong Kong Hang Seng Tech Index, which pursues traces in China (including trade in the United States), decreased by 4.6%.

Chinese companies have long applied to deep and liquid markets in the United States to raise the capital. Alibaba’s IPO on New York Stock Exchange 2014 collected $ 25 billionAt one time, the world’s largest IPO and only by Saudi Aramco 2019 in Riyadh.

As of the end of March, 286 Chinese companies are listed on US stock exchanges, a total of 1.1 trillion dollars, according to exchange data, cited exchange data. Southern China MailA number

Still, US investors have been derived from the bad audit standards among Chinese companies. Technically, the companies listed in the United States must open their books to US regulators, but Chinese officials often depict such entrance, citing national security. Revelation 2020 ordered Chinese companies Right to enter US regulators or risk of risk of throwing from US exchange.

China has agreed to allow US regulators to review audit documents in 2022 after starting negotiations Chinese Hong Kong CityEliminating deleted threat and soothing investors.

The damage has already been done yet, as the Chinese companies listed in the United States began to study the secondary lists in Hong Kong. Last year, Alibaba modernized his Hong Kong list Preliminary listing that allows Chinese e-commerce to Tap Content Chinese Investors via the city’s Southwound Connect scheme.

Some investors “passed through the US Hong Kong ticket because of the murder of threats,” Rao said.

Hong Kong can be a winner

In mid-April, Goldman Sach assessed that US institutional investors in Chinese companies maintain about $ 830 billion worth of shares, and are spread in continental Chinese, Hong Kong and US markets. Its about $ 250 billion in Chinese ADRs.

Still, the reserves of “foreigners, particularly US carriers”, which have been meaningfully fell to where we were five years ago, “said journalists during the briefings during the briefing. “The risk has definitely reduced meaningful.”

RAO notes that US investors can still trade Chinese companies, even if they are deleted, it will just be less protected in the OTC market. Tencent, one of the largest technology companies in China, has its own main list in Hong Kong, but is also sold in the US OTC market.

Meanwhile, Chinese companies are already complicating about other options. In a conversation with journalists within the framework of the Shanghai Auto Show, Pony.ai General Manager James Peng said the secondary list Hong Kong was possiblyAlthough he confirmed that the beginner focused on the issue of the next generation of vehicles.

Geely auto is Also taking Its US-listed ev brand Zeekr private, fair one year After IPO of his New York, to correct the actions of the Chinese car giant and improve the profitability.

In mid-April, Goldman Sachs highlighted 27 Chinese companies listed in the United States, which will most likely be eligible for the Futu and Digital Logical Platform for the Futu and Digital Logistics Platform.

But some Chinese companies are bold geopolitics to pursue the US listing. Chape, Chinese tea chain, raised $ 411 million April 17 at the US IPO with debut in Nosdak.

Hong Kong seems to be more attractive or, at least a bad place for trading shares. The prior list of continental Chinese investors opens the priority list, which sells the company’s shares. On the southern borders (ie continental China Hong Kong) Increased in recent monthsBecause continental Chinese investors are barrel AI boom are represented by companies like Alibaba and Semiconductor International Production CorporationA number

“It’s quite sensible, the secondary listing in Hong Kong, if you are a Chinese Chinese company,” says Rao.

The city passes through the Renaissance of IPO, as Chinese Chinese companies now hope to overcome world capital through a listing “abroad”. Last November, a 4 Billion Dollar IPO by MideaThe world’s largest household appliances manufacturer, left for things. Mixed, ice cream chain with more nozzles than McDonald’s, followed in MarchA number

Hong Kong expects at least two blockbuster IPOs in the coming months. CATL, The main supplier of Tesla’s batteries hopes increase $ 5 billion In Hong Kong in the near future. (JPMorgan and Bank of America support IPO that has Involved the study of Congress.) Chinese carmaker Chery Auto is Also moving $ 1.5 billion for collecting $ 1.5 billion.

But Hong Kong is not a perfect replacement for New York. “There are no positive ones. Liquidity in Hong Kong is not the same as in the United States, “Chu said on Wednesday.

This story was originally shown Fortune.com