Chinese companies are putting off plans for U.S. listings as tensions between the world's top two economies rise, lawyers, bankers, accountants and regulators involved in what has been a major capital-raising route told Reuters.
Enquiries about U.S. listings have halved this year at one of the big four accounting firms in China versus 2019 levels, a senior auditor from the firm said. Listings take at the minimum several months to arrange, involving appointing advisers, preparing a prospectus and obtaining regulatory approvals. The further along the path a company is, the less likely it is to change plans.Chinese firms accounted for about a third, or some US$279 billion, of funds raised globally via IPOs in the past five years. About half of that was overseas, mostly through New York and Hong Kong floats.
But a bill passed by the U.S. Senate which, if signed by President Donald Trump, would require U.S.-listed foreign companies to disclose levels of government control. It would also require that Chinese companies comply with U.S. oversight of their audits or face being delisted.