Private Chinese companies are choosing to stay inside national borders rather than expanding outside in the United States. Their new area of interest is sophisticated technology and mergers and acquisitions in Southeast Asia, Europe, and Africa.
Chinese private companies reject U.S. listings as an option
According to a recent poll, Chinese private companies are choosing a home listing over a U.S. initial public offering (IPO) in order to expand worldwide and avoid the United States. The poll reveals the effect of the trade war on executive decision-making and was carried out jointly by Marcum Bernstein and Pinchuk LLP and China’s Tsinghua University.
More than 1,200 company professionals were polled for the survey, and the results showed that 66% of them thought China was the most tempting place to list a firm, with only 18.7% of them leaning toward the American market. At a time when the city is dealing with violent protests, Hong Kong is also favoured over the United States as a location for IPOs.
Chinese CEOs are still committed to growing internationally despite trade disputes. They are turning their emphasis away from the United States and toward Southeast Asia, Europe, and Africa.
According to Drew Bernstein, a co-managing partner at MarcumBP, while making plans, the majority of executives avoid the United States. Bernstein predicts that American investors will nonetheless be drawn to China’s rapidly expanding unicorn tech companies, and that many Chinese businesses will continue to require access to the extensive and very liquid U.S. capital markets in order to raise money.
According to the poll, 71% of Chinese CEOs are open to the idea of using mergers and acquisitions as part of their growth plan. The most crucial element in such efforts was determined to be acquiring cutting-edge technology. The research also emphasizes how Chinese CEOs have changed their focus for international expansion away from the United States and toward Southeast Asia, Europe, and Africa.
In a poll conducted at the beginning of the third quarter, it was discovered that 71% of Chinese CEOs believe that using mergers and acquisitions to increase their market share is the most effective strategy.
While Beijing encourages domestic Chinese company listings, American legislators are calling for more oversight of Chinese capital raising and investment.
Last week, the U.S.-China Economic and Security Review Commission (USCC) sent Congress a report outlining steps to limit U.S. cash flows to Chinese firms. The study also drew attention to the worries of American politicians over ongoing Chinese investment in high-tech American industries.
Due to these worries, USCC has recommended legislation that would bar Chinese businesses from listing securities on American stock exchanges if their disclosure is found to be insufficient and in violation of U.S. laws. This action is considered as an effort to safeguard the integrity of American financial markets as well as to guarantee the accuracy of Chinese companies’ financial statements.
Bernstein, however, is of the opinion that the proposition is not purely political. He emphasized that the action will be taken in an effort to strengthen and guarantee the veracity of financial statements from Chinese enterprises.
Singapore Banks and the Government Collaborate to Create Industry Standards for Cryptocurrencies
In order to provide a uniform set of guidelines for vetting potential clients in the digital asset and cryptocurrency industries, Singapore banks are working with the nation’s central bank and law enforcement. The action is a reaction to the recent scandals and bankruptcy that have afflicted the cryptocurrency business.
For the last six months, the banks and the Monetary Authority of Singapore (MAS) have collaborated to create a thorough customer screening procedure for the digital asset sector. In order to comprehend and control the risks posed by clients, these institutions will need to do customer due diligence.
The project’s working group, which is managed by banks, includes the MAS and police, but the client acceptance procedure will be determined by each customer’s level of risk tolerance.
Within the following two months, a thorough report summarizing the screening process’ best practices should be released. Streaming credits, non-fungible tokens, and stablecoin will all be covered in the report.
Singapore has made it a priority to enact laws that encourage businesses to locate their headquarters in the region in an effort to establish itself as a hub for cryptocurrencies. Companies Circle and Paxos that issue stablecoins have already been granted permission to operate in the nation.
The largest bank in the nation, DBS Bank, has started integrating apps for decentralized finance into its markets and launched a self-directed bitcoin trading platform for investors that match the requirements.
Although Singaporean banks have opted to work with the government to create uniform screening criteria for potential clients working in the cryptocurrency and digital asset industries, U.S. institutions are still staying away from the cryptocurrency business, despite the fact that there has been a lot of volatility in the markets since the banking crisis.
Stablecoins, non-fungible tokens (NFTs), and transferable gaming or streaming credits will all be covered by the new proposals in addition to businesses that offer payment, trading, and transfer services.
It will be left to the banks to determine whether to accept or reject a client depending on their risk appetite, with the rules offered acting more as recommendations than regulations.
