The Chinese version of Twitter debuted on the Hong Kong Stock Exchange and lost money. Since its IPO in 2000, Weibo has been traded on Nasdaq, where its stock has lost more than a third of its value. The trade war between the United States and China has impacted Chinese companies listed on US exchanges. Alibaba, a well-known Chinese company that was formerly listed in the United States, is now listed in Hong Kong as well.
The dispute between the US and China has affected Chinese technical enterprises. President Donald Trump began the “trade war” by accusing China of unfair trade practises and intellectual property theft. This trade conflict has devolved into a cold war, with both sides implementing penalties, limitations, high import taxes, and regulatory regulations on one another.
The Securities and Exchange Commission (SEC) of the United States recently finalised guidelines that allow regulatory authorities to delist Chinese businesses if their auditors fail to submit information requested by them in accordance with the rules for three years. Chinese regulators have routinely denied US regulators access to Chinese companies’ accounts for scrutiny. Chinese companies are being forced to list in Hong Kong as a result of these laws. In both the US and Hong Kong markets, their shares have declined.
Fundamentally, “Investors will be able to quickly identify registrants whose auditing firms are based in a foreign jurisdiction that the PCAOB (Public Company Accounting Oversight Board) cannot fully scrutinise under the adopted rule. Foreign issuers would also be obliged to declare the percentage of their companies owned by foreign governments “an official from the Securities and Exchange Commission (SEC) stated .
If a Chinese firm that is listed on the New York Stock Exchange delists/is delisted, investors will face one of the following outcomes: The Chinese corporation decides to go private and buys back its investors’ shares. The price is set by shareholders. Investors can swap their American Depository Receipts (ADRs) for foreign equity in Chinese companies. This necessitates the company’s listing on multiple stock exchanges; shares of foreign businesses listed on the NYSE are packaged into ADR by US banks. In dollars, they are traded like stock. Foreign enterprises can acquire access to capital in the United States in this manner.
Tencent and NetEase, two well-known gaming companies, were sanctioned by Chinese government in September due to regulatory violations. WeChat, China’s most popular instant messaging programme, is also owned by Tencent. It also owns a substantial stake in Didi.
China has refused to allow social media platforms based in the United States, such as Twitter and Facebook, to launch in the country. As a result, homegrown platforms such as WeChat and Weibo have thrived.
NetEase also offers music streaming and a news app in addition to gaming. It also runs China’s most popular free e-mail service. In August of 2014, NetEase established its headquarters in the United States.