Speaking with CNBC, TCW Group’s David Loevinger believes that it is “game over” for most U.S.-listed Chinese companies and that the majority will exit the U.S. capital market by 2024. On the matter, he stated:
Relationship is worsening
In addition, Loevinger stressed that the relationship between the two countries is not likely to improve in the foreseeable future and that there is no chance of resolving the situation in the next few years. He added. When asked about when the delisting would reach a tipping point, the strategist said that we had already reached that point, citing the incident with the Chinese ride-hailing business Didi a few weeks before. With Didi’s departure from Wall Street, the trading world moves closer to Beijing’s grasp. Didi is relocating its stock listing to Hong Kong, potentially signaling the beginning of a wave of business withdrawals as Beijing intensifies its monitoring of the country’s corporate sector. When the Chinese ride-hailing behemoth chose to delist its shares from the New York Stock Exchange, it was a dramatic turnaround that underlined the widening gulf between Wall Street and China’s quickly rising business sector. Contrasting with the excitement when Didi went public on the New York Stock Exchange less than six months ago, it was the latest Chinese start-up to do so, following in the footsteps of giants like Alibaba (NYSE: BABA) and Baidu.
China front running U.S. withdrawals
Investors in the United States will have little difficulty transferring their funds to Chinese enterprises, but they will have to do it on China’s terms. Loevinger stated that, in a sense, China is taking the lead in this and effectively telling the United States that they cannot force them out as they are leaving. Ultimately, the strategist believes that it is unlikely that the Chinese government would provide unlimited access to internal auditing papers to United States authorities. The long-standing, uncomfortable trading relationship between the two countries has deteriorated significantly in recent years. Only time will tell what influence this will have on Chinese equities, which experts forecast to have a positive future. Watch the video: It’s ‘game over’ for many U.S.-listed Chinese companies: Strategist
