China’s crackdown on US listings heralds new era
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China’s crackdown on US listings heralds new era

Beijing made clear this week that it is determined to stop its firms from selling shares in New York. A simultaneous crackdown on ride-hailing firm Didi also offers a timely reminder to global investors that China is no longer committed to market reforms but to ideology and sovereignty in the Xi Jinping era.


Any lingering doubt that China is committed to building a capital markets engine strong enough to fuel and fund its ambitions – to be rich, globally respected (and even feared) as well as economically and financially secure – were dispelled this week.

On Tuesday July 6, Beijing set out rules that threaten to rein in US listings by mainland companies, something it has long wanted to do but always held back from.

This came in the wake of a crackdown on Didi by a hitherto little-known regulator, the Cyberspace Administration of China, days after the ride-hailing giant completed its $4.4 billion New York IPO.

Didi priced its US depositary receipts on the New York Stock Exchange at $14. They jumped on the first day of trading to more than $16.

The consequences will be worse for Didi than for Ant

When China announced a probe into the firm on national security grounds and pulled the company’s app from stores, its ADRs nosedived. By the end of Thursday they were trading at $11.21.

The confluence of events left bankers and investors scrambling for answers.

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