Fleeing From Control or Raising Capital? Chinese Companies Pile Into US Stock Market

The number of China-based companies that rushed into the U.S. stock market hit a 10-year high in 2020, even as several others were removed, according to a study by the University of Florida.

Political commentator Li Linyi said the Chinese regime wants to raise capital in the United States through these companies to support its technology and military.

Several big companies were delisted by the New York Stock Exchange (NYSE). More were removed by index providers including MSCI, FTSE Russell, and S&P Dow Jones Indices, in response to the ban on investment in Chinese regime military-owned or -controlled companies.

On March 9, the NYSE delisted China’s largest offshore oil producer, China National Offshore Oil Corporation. In January, it ended trading in shares of China Mobile, China Telecom, and China Unicom.

However, the threat of shutdown has not dampened the appetite of Chinese companies to list on U.S. exchanges.

In 2020, 30 companies came to the United States to complete an initial public offering (IPO), the highest number since 2011, raising an estimated $12.1 billion, the highest amount since 2014.

As of March 18, 238 Chinese companies were listed on U.S. stock exchanges, with almost $1.9 trillion in market capitalization, based on data from StockMarketMBA.com.

More Chinese companies are lining up to go public in New York. One of the largest private equity firms, Hony Capital, is among them.

Hony Capital

The China-focused Hony Capital seeks to raise $300 million to apply for listing a special purpose acquisition company on the Nasdaq.