US Lawmakers Urge SEC To Delist Chinese Companies Alibaba, XPeng, Baidu & More

US Lawmakers Urge SEC To Delist Chinese Companies Alibaba, XPeng, Baidu & More

  • 4 hours ago
  • benzinga.com
  • Keywords: Stock Market

Two US lawmakers have called on the SEC to delist over 25 Chinese companies from US stock exchanges, citing national security concerns and alleging that these firms are used for state purposes due to China's military-civil fusion policy.

XPeng ReportsBIDUsentiment_dissatisfiedJDCMFsentiment_dissatisfiedHSAIsentiment_dissatisfied
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Estimated market influence

Alibaba Group Holding Ltd.

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Analyst rating: N/A

The lawmakers are urging the SEC to delist Alibaba from U.S. stock exchanges due to national security concerns.

Baidu, Inc.

Baidu, Inc.

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Analyst rating: Buy

Likewise, Baidu is one of the companies targeted for potential delisting by the SEC due to similar reasons as Alibaba.

JD.com, Inc.

JD.com, Inc.

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Analyst rating: Strong buy

The lawmakers are pushing for JD.com's delisting from U.S. exchanges over national security concerns linked to China's military-civil fusion policy.

Hesai Group

Hesai Group

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Analyst rating: N/A

Hesai Group is among the 25 Chinese companies that could be delisted from U.S. stock exchanges due to national security issues.

BilliBili, Inc.

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Analyst rating: N/A

The lawmakers are urging the SEC to delist Bilibili as part of their effort to remove 25 Chinese firms over national security concerns.

XPeng, Inc.

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Analyst rating: N/A

XPeng is one of the targeted companies for potential delisting due to national security issues tied to China's policies.

Weibo Corp.

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Analyst rating: N/A

Weibo Corp. is included in the list of 25 Chinese companies that could be delisted from U.S. exchanges due to national security concerns.

Context

Analysis: US Lawmakers Urge SEC To Delist Chinese Companies Alibaba, XPeng, Baidu & More

Key Facts and Data Points

  • 25 Chinese companies targeted for delisting from U.S. stock exchanges.
    • Includes Alibaba Group Holding Ltd. (BABA), Baidu, Inc. (BIDU), JD.com, Inc. (JD), Hesai Group (HSAI), BilliBili, Inc. (BILI), XPeng, Inc. (XPEV), and Weibo Corp. (WB).
  • Lawmakers cite national security concerns tied to China's military-civil fusion policy.
  • Allegations include misuse of U.S. investor capital for advancing Chinese Communist Party goals like military modernization and human rights abuses.

Market Implications

  • Investor Impact: Delisting could lead to:
    • Increased volatility, particularly for funds with significant exposure to Chinese equities (e.g., KraneShares CSI China Internet ETF (KWEB)).
    • Forced selling of shares by investors.
    • Reduced liquidity and potential financial losses.
  • Operational Challenges: Companies may face operational disruptions due to delisting.

Competitive Dynamics and Strategic Considerations

  • U.S.-China Relations: The move could escalate tensions between the two nations, impacting trade relations and global markets.
  • Global Market Shifts: Delisting may prompt Chinese companies to seek alternative listing venues (e.g., China-based exchanges).
  • Regulatory Adaptation: U.S. regulators may need to revisit rules for foreign company listings to address compliance concerns.

Long-Term Effects and Regulatory Impact

  • Potential Shift in Global Capital Flows: Delisting could divert investment away from U.S. markets, reshaping global financial dynamics.
  • Strategic Repercussions: The move may influence Chinese companies' strategic decisions regarding international expansion and capital raising.
  • Regulatory Scrutiny: Heightened scrutiny of foreign firms in the U.S. could set a precedent for future regulatory actions.

Conclusion

The proposed delisting of 25 Chinese companies from U.S. exchanges represents a significant shift in geopolitical and market dynamics. While it poses risks to investors and global markets, it also highlights ongoing tensions between the U.S. and China over national security and corporate governance.