The amount of money raised by Chinese companies via initial public offerings (IPO’s) on American bourses has risen to a six year peak, despite the spread of the COVID-19 pandemic and worsening Sino-US relations.
China-based companies undertook a total of 30 IPO’s in the US in 2020 that collectively raised USD$11.7 billion, according to a report from Renaissance Capital published on 17 December.
This marks the largest volume of capital raised by China-based companies via US exchanges since 2014, when 16 firms raised $25.7 billion. The 2014 reading was skewed however, by the mammoth listing of Chinese e-commerce giant Alibaba.
Chinese companies that listed in the US this year included Shanghai-based fintech giant Lufax and real estate platform Ke, both of whose listings were amongst America’s top 10 IPO’s for 2020.
Other Chinese IPO’s included that of Dada – a Walmart-backed grocery delivery platform; LGBTQ dating app BlueCity, and electric vehicle companies Xpeng and Li Auto.
These cross-Pacific IPO’s arrived despite the severe impacts of the COVID-19 pandemic in both China and the US, and the launch of multiple measures under the Trump administration to impede the ability of Chinese companies to raise state-side funds.
These include NASDAQ launching tighter listing requirements for Chinese companies in the wake of the Luckin Coffee accounting scandal in April, and Trump mulling the requirement that Chinese firms seeking IPO’s in America comply with stricter GAAP standards.
The Trump administration also issued an executive order in November banning US investors from acquiring stakes in 31 Chinese companies that the Defense Department categorises as backed by China’s military. The move subsequently prompted the removal of 21 Chinese companies from S&P DJI indices.