Hong Kong’s Financial Secretary Paul Chan Mo-Po has said the region is now emerging as an ideal destination for US-listed Chinese firms due to various regulatory reforms.
Speaking during the 15th Asian Financial Forum, Chan stated that the city has a greater appeal to the companies due to green financing and the Chinese central bank’s digital yuan, South China Morning Post reports.
According to Chan, the city is always preparing to host the companies despite the stock market plunging 17% for the first in 2021 since 2017.
“With mainland companies seeking to grow and still hoping to explore international financing in the face of increasing regulatory uncertainty in the U.S., it is likely that we will see more China concept stocks return from the overseas market,” Chan said.
To attract the companies, the operator, Hong Kong Exchanges and Clearing (HKEX) announced that companies with a minimum valuation of HK$3 billion (US$384.77 million) with U.S. or UK listing could launch a secondary listing in the city. The directive took effect on January 1st.
Furthermore, HKEX also allowed special purpose acquisition companies (SPACs) to list in the region as part of the reforms. Hong Kong is also banking on the digital yuan, with Chan revealing that Hong Kong Monetary Authority (HKMA) had conducted encouraging tests on the CBDC. Notably, the regulators seek to expand the digital yuan to Hong Kong banks.
Increased crackdown on Chinese companies
This comes after the U.S. accelerated plans to delist Chinese companies from American exchanges amid growing tensions between the two countries.
In this line, the Securities Exchange Commission announced that it would crack down on non-compliant foreign companies in a new regulatory rollout. Following the directive, companies might be kicked out of the U.S. major exchanges by 2023.
As reported earlier by Finbold, TCW Group’s David Loevinger stated that following the new SEC directive, it was now “game over” for most U.S.-listed Chinese companies. He projected that the U.S. might fully resolve not to list the companies in the future.