Isabelle Feng: Cut off from American capital, will Chinese companies continue to thrive under the austerity measures dictated by President Xi Jinping? »
LOn July 29, forty-eight hours after the release of its 2021 annual report, Alibaba saw its shares on the New York Stock Exchange (NYSE) plummet more than 11% in a single day, and for good reason: The Securities and Exchange Commission (SEC), the Wall Street “cop” added it to its list of Chinese listings that violate the federal Holding Foreign Companies Accountable Act (HFCAA).
If this were just another name on the long list of 159 candidates for delisting for failing to meet US auditing standards, the demise of Jack Ma’s company would mark the end of a period.
Clearly, having been hailed as the biggest IPO in history by raising $25 billion in September 2014, Alibaba has no illusions that Wall Street will continue and is considering the worst-case scenario -Scenario, because on July On February 27, during the filing of its annual report with the SEC, it filed with the Hong Kong Stock Exchange for a second primary listing. Everything indicates that the group is preparing its withdrawal with fatal consequences and the countdown to its delisting is in full swing. Without a gesture from Beijing, the American stock market will be emptied of Chinese ratings by the end of 2024.
But it all started as a warm accord between Red Empire corporations, who wanted access to the world’s largest capital market, and Wall Street, for whom money has no color. For more than a decade, so-called “capitalism with Chinese characteristics” has been hailed by countless analysts disenchanted with capitalism as such, and the arrival of Chinese companies has delighted Western investors, whose funds have also helped the expansion of the champions of the second world power.
unlikely honeymoon
To measure the perfect financial “coupling” of the two Pacific coasts, it is enough to search the list of Alibaba securities holders, which includes the names of the largest banks, such as Goldman Sachs and HSBC, but also California public employee retirees System (Calpers), the largest public pension fund in the United States; and the Ontario Teachers’ Pension Plan, the second-largest institutional fund in Canada managing Ontario teacher retirements, to name a few.
The unlikely honeymoon might have continued if China had not believed that the audit documents of its companies operating on foreign soil are a matter of national security and that US regulators’ inspection of those documents is a violation of national sovereignty.
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