CNBC's The China Connection newsletter: U.S. regulatory scrutiny fans Chinese stock delisting fears – CNBC

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Intensifying regulations on US-listed Chinese companies has caused concerns that it was abolished and threatens its implementation for more than a decade Alibaba Other Chinese companies on US exchanges.

abroad “Everything is on the table“A comment from U.S. Treasury Secretary Scott Bescent on April 9 rekindled the fears on Wall Street that hundreds of billions of dollars could be leaked by forcing Chinese stocks from the US exchange.

Thank you for the latest version of Laws issued in 2020the Securities and Exchange Commission can encourage Chinese stocks to be listed if the company is deemed to be in violation of an audit request for the second year in a row. Paul Atkins was sworn in as SEC Chairman on Mondayshowed he would do so at a hearing last month. I support that process To scrutinize Chinese stocks registered with the US.

The ongoing analysts and press in Bessent’s comments reflect how uncertainty is widespread. New York Post Tabloid.

“In an extreme scenario, US investors may have to settle US$800 million worth of holdings in Chinese stocks if they are banned from investing in Chinese securities,” Goldman Sachs said in a memo last week.

They predicted that Chinese investors might also need to sell US financial assets, with estimates of around $370 billion in stocks and $1.3 trillion in bonds.

Tracking Chinese stocks tracking the popular $5.9 billion US exchange trade fund Kraneshares told clients its listing last week Chinese companies have a low probability. Returning to the fear of abolishing the previous round of 2022, the company Shift has begun Most of it Kraneshares CSI China InternetEtf (KWEB) Holds shares sold in Hong Kong by a Chinese company listed in the US. Kraneshares has repeatedly taken that approach with “impossible events” registered in the US

Alibaba listed additional stakes in Hong Kong in 2019 five years after a massive initial public offering in New York. Baidu, JD.com and several other Chinese companies have also offered stocks in Hong Kong in recent years, but Temu Parent Holding a PDD I haven’t done that in particular yet.

PDD did not respond immediately to CNBC requests for comments. The e-commerce company moved its headquarters from China to Ireland in 2023.

The background here is President Donald Trump.”America’s First Investment Policy“Memo released in late February. A new scrutiny of publicly traded Chinese companies was sought through both reviews of US investment in Chinese companies and through a commonly used listing structure and the responsible law of foreign companies that became law in 2020.

Winston MA, adjunct professor at the NYU Law School of Law, says the memo is a broad mandate for many government agencies to “enforce existing rules and create new rules” to “enforce existing rules and create new rules.”

The author of “Digital Wars: How China’s Technology Power Shapes the Future of AI, Blockchain and Cyberspace,” said MA, who said that if regulators act now, could use the fiscal reporting period ending in April 2025 as their first year. “Delisting could be faster than you think,” he said.

Accounting Monitoring Committee of public companies that fall under SEC monitoring; I said it in 2022 it was You can check the audit records of potentially affected Chinese companies. For now, under the Act, “no issuer is at risk of securities being subject to a ban on trading.” SEC Website.

The SEC did not immediately respond to CNBC’s request for comment, but PCAOB declined to comment.

Later last week, the China House Select Committee wrote to JPMorgan Chase CEO Jamie Dimon and Bank of America CEO Brian Moynihan requesting investment banking Draws out of Hong Kong IPO underwriting Chinese battery giant Hyundai Ampelex Technology. Jpmorgan declined to comment, but Bank of America did not respond.

Trump’s recent nausea with Harvard also means more scrutiny of how US university contribution funds have won billions from Chinese investments.

A House committee previously cited research from the US advocacy group Future Union How US pension funds and university contributions invested in China.

“Atkins is under pressure to take a definitive stand on decades of overlapping double standards,” future union executive director Andrew King said in an email. He is also a managing partner at Bastille, a venture capital firm based in San Francisco.

“The delisting has been postponed and China has taken over the hands of Stonewalling regulators and flaunting incidents like Luckin Coffee fraud with inaction,” he said. “Now they’ll lose their way to secondary funding without supervision.”

China’s securities regulators are aiming to increase the supervision of domestic companies listed overseas, particularly after registering with the US IPO of passenger company Diddy in 2021. Under the new process of Chinese Securities Regulators, few Chinese companies have been able to list in the US in recent months, including Chinese milk tea companies. Change Just last week.

Worries about delisting could be exaggerated, at least in the recent period, as indicated long delays to the legally binding sale of Tiktok. However, investors may choose to vote on their feet first.

The White House shows potential easing in China’s tensions. US Treasury Secretary Scott Bescent told investors on Tuesday he was expecting him. A person in the room told CNBC that the US-China trade war to escalate “in the very near future.” The comments came the day after China vowed retaliation against the country following our call to quarantine Beijing.

Nvidia CEO Jensen Huang visited China and met several well-known figures. Huang is Official meeting with China’s deputy prime minister Thursday in Beijing – and Reportedly, Liang Wenfeng of Deepseek. The latest Pew Research Survey on Americans: It softens with China’s negative view.

Local governments in China will shave their Bitcoin sales to reinforce empty funding. That consideration was reported by Reuters Thursday. China has banned cryptocurrency for years, with cash-bound local governments sitting on seized assets. According to official data, the unemployment rate among young Chinese people aged 16-24 fell to 16.9% in March, and to 16.9% in February.

China and Hong Kong stocks were trading in positive territory on Wednesday as investors cheered Potential easing of US-China trade tensions.