A broker works on the New York Stock Exchange (NYSE) trading floor after the opening bell in New York, USA, on March 13, 2020.
Lucas Jackson | Reuters
GUANGZHOU, China – The main double-listed Chinese technology stocks traded in Hong Kong were shaken on Thursday, amid fears that some companies might be removed from the list in the United States
Hong Kong’s shares in Chinese technology stocks listed in the U.S. have fallen dramatically. Alibaba fell more than 4% at 1:04 pm Hong Kong time, Baidu fell more than 8%, JD.com fell more than 4% and NetEase was almost 3% lower.
It comes a day after the United States Securities and Exchange Commission (SEC) adopted a law called the Holding Foreign Companies Accountable Act, which was passed by the government of former President Donald Trump.
Certain companies identified by the SEC will require auditing by a U.S. watchdog. These companies will be required to produce certain documents to establish that they do not belong or are not controlled by a governmental entity in a foreign jurisdiction.
Chinese companies will have to appoint each board member who is an official of the Chinese Communist Party, the SEC said on Wednesday.
The US regulator can prevent trading in securities that violate its rules.
Chinese technology companies are not only under pressure from the threat of delisting abroad, but are also concerned about stricter regulations at home. Beijing has sought to harness the power of the tech giants and establish new rules in areas ranging from financial technology to e-commerce.
Although the Chinese government’s crackdown began with billionaire Jack Ma’s empire, including the suspension of Ant Group’s initial mega takeover, there are signs that Beijing’s goals may extend beyond Ant.
Reuters reported this week that Tencent founder Pony Ma met with Chinese antitrust officials this month. Tencent is listed only in Hong Kong and its shares fell more than 2% around 1:17 pm, Hong Kong time.