The emergence of Chinese companies and their listing on US stock exchanges has been one of the features of the country’s rise over the last decade.
Now Reuters reports the tide may be turning as disaffected Chinese companies shift back to local stock market listings to counter what they believe are under valuations from US investors.
Two of the notable things about the Chinese stock markets have been the lack of transparency and their volatility.
It may be the current attractive valuations are part of that volatility with the Shanghai Composite stock index having more than doubled this year as opposed to the S&P 500 being up a comparatively disappointing five percent.
For Chinese companies, the relative transparency and discipline of US market listing rules also promised to raise their internal management standards.
The US markets also gained from the Chinese listings as these cemented the nation’s position as the world’s tech centre, with the attraction of American markets fading an opportunity opens for European and Asian exchanges.
Overall, the withdrawal of Chinese companies from US stock exchanges would be a shame for both countries as it makes each of them stronger.