In December 2020, the U.S. Congress passed, with bipartisan support, the Holding Foreign Companies Accountable Act stipulating that any company that failed to open its books to regulators within three years must delist.
On May 5, 2022, the U.S. Securities and Exchange Commission added more than 80 companies to its provisional list of companies that face delisting in three years if they don’t grant U.S. regulators access to their books. The additions include some of China’s most prominent tech companies, like e-commerce company JD.com, video game publisher NetEase, video platform Bilibili, agriculture-focused e-commerce platform Pinduoduo, and electric-car maker NIO. The added companies have until May 25 to dispute the SEC's classification.
The roster of U.S.-listed companies now provisionally or conclusively highlighted for possible delisting now numbers over 120, including other big names like Li Auto, Baidu, and Yum China Holdings. In total, about 250 Chinese companies are listed on U.S. exchanges, with a combined market capitalization of over USD 1 trillion, according to the Wall Street Journal.
In December 2020, the U.S. Congress passed, with bipartisan support, the Holding Foreign Companies Accountable Act stipulating that any company that failed to open its books to regulators within three years must delist. Several Chinese companies already have left or are planning to leave U.S. exchanges. China Mobile, China Telecom, and China Unicom exited the New York Stock Exchange in early 2021 following a Trump administration order barring Americans from investing in the companies. Didi is planning to delist from the NYSE and re-list in Hong Kong amid dual investigations from both U.S. and Chinese regulators. Several of the Chinese companies named on the SEC’s list, like JD.com, Bilibili, and NetEase, already have secondary listings in Hong Kong. More Chinese companies may turn to Hong Kong or other Chinese stock exchanges for secondary listings—or re-listings if it comes to that—as a hedge against U.S. action.