Over the last decade, the involvement of Chinese enterprises in American primary markets has aggregated to a combined market capitalisation of $2.1tn. In light of this, the ongoing financial decoupling measures being taken by both countries calls into question the fate of capital movement across the two biggest economies in the world.
These concerns have become more pressing following the decision of the Chinese group Didi Chuxing (second-biggest IPO – $4.4bn – by a Chinese company in New York since Alibaba in 2014) to delist from the New York Stock Exchange and go public in Hong Kong. Although the decision may seem coerced due to intense pressure from Chinese cyber security watchdogs, it opens up the possibility of more companies following suit to avoid legal troubles with the Chinese government. On the other hand, Chinese state-run telecom groups (namely China Telecom, China Mobile, and China Unicorn) were booted from the New York Stock Exchange in early 2021 due to an executive order from the Trump administration that prohibited American investments in businesses with alleged ties to the Chinese military.Continue reading “Sino-US Financial Decoupling: a series of bad decisions?”