Illustration: Luo Xuan/GT

Two recent scandals involving Chinese companies that admitted falsifying their accounts have unleashed a fresh wave of smear campaigns against what many refer to as "China Inc," suggesting that all Chinese companies are untrustworthy and resulting in short selling of US-listed shares in Chinese corporations. 

Luckin Coffee Inc and TAL Education Group both recently admitted to mistakes in their accounting process, which sent their share prices into a free fall. In any normal environment, the incidents should be treated as isolated business matters without any political impact. But we are living in a different world today, particularly when it comes to business between China and the US. 

As US officials waged a trade war with China, cracked down on Chinese firms and actively pursued a China-US decoupling, isolated incidents can be seriously overblown and all Chinese companies can face serious repercussions, not just from the US government but also short sellers. 

This is already happening. Since Luckin's scandal, US media outlets, law firms and short sellers have targeted a slew of Chinese companies, including education platform New Oriental Education & Technology Group, car rental firm CAR Inc and video content provider Iqiyi Inc. Share prices for these companies have all fallen sharply because of doubts or unverified claims about the accuracy of their numbers.

Chinese companies are no strangers to being targeted by short-sellers and some firms like Iqiyi have fought back against the unsubstantiated claims and stabilized their share prices, but this could be just the beginning of a more pronounced and persistent wave of attacks on them. In these attacks, a wide range of US elements from officials to media outlets to law firms to short sellers work in tandem. Here is how it works: Officials in Washington smear China and call for decoupling, US law firms lodge accusations against Chinese firms, media outlets amplify these accusations and short sellers move in to profit.

In a sign that more Chinese companies could be targeted, a Bloomberg report on Wednesday claimed that "Luckin may put lasting stain on China Inc. listings," adding that "Chinese companies' opaque numbers" are once again drawing widespread attention. In a separate report, Bloomberg said that the two scandals have burned US investors and underscored concerns over "lax corporate governance" at some Chinese companies. It is hard to imagine any credible media outlet would issue such a sweeping indictment of a group of companies based on two incidents just because they are from the same country.

But this is the reality for Chinese companies. And for the 150 or so Chinese corporations listed in the US, this is a huge risk for them and it's time to consider alternatives to US listings. There are sound options. The A-share market in the Chinese mainland and the Hong Kong Stock Exchange have opened their arms to these companies after regulators removed hurdles for them. 

Some companies have already listed or are planning to be listed in Shanghai or Hong Kong. For example, Alibaba Group's secondary listing in Hong Kong last year was a success and China International Capital Corp has also recently started the procedure to be listed on the A-share market. It's time for other companies to follow suit if they want to avoid potential risks.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn