Political tensions between the US and China are nothing new and have existed through different presidents over decades and on both sides of the political spectrum, despite this, however, China has remained one of the largest trade partners of America. Doing business with China also extends into Wall Street, with Chinese companies going public on the New York Stock Exchange.
Recently China has been making moves, not just growing their GDP but also introducing their own digital yuan increasing centralization and state power over the people. Moreover, about 60 Chinese companies are planning to go public in the U.S. this year alone. China is seeing a surge in startups, and hosts some of the biggest unicorns such as ByteDance, the owners of TikTok. In tandem with a red-hot IPO market in the US, and it makes sense why so many Chinese companies are looking to give themselves an economic boost from going public in the US. This also comes after fears of delisting from the prior administration have come lower under Biden.
However, the sentiment is mixed, some investors believe these Chinese IPOs are firm investment that have lots of potential, while others, such as Ringo Choi, Asia-Pacific IPO leader at EY said: “pricing trend is not as good as last year,” and that he expects a slowdown in public offerings beginning in the third quarter of this year, especially if the macroeconomic environment takes a turn for the worse.
What do you think about China’s IPO boom, and will you be investing?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.