$2 Trln in Chinese Wall Street Listings Could Be Swept Away Amid Growing PRC, US Regulatory Pressure | WHAT REALLY HAPPENED

$2 Trln in Chinese Wall Street Listings Could Be Swept Away Amid Growing PRC, US Regulatory Pressure

Chinese companies began a careful foray into the US stock market in the early 2000s, tantalised by the prospects of picking easy cash from American investors eager to invest in the world’s new economic powerhouse.

Two loopholes which have enabled Chinese companies to thrive on Wall Street may soon be closed, threatening to deprive US markets of much of the $2+ trillion in market capitalisation accrued by the nearly 250 Chinese firms listed on US exchanges, Business Insider reports.

The first loophole is the Variable Interest Entity (VIE), a structure used by Chinese companies to get around strict regulations imposed by the Asian nation’s government on foreign ownership of strategic companies in sectors including telecoms, high tech and media.

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