stock market: Xinhua Photo

 
US President Donald Trump’s pledge to make the US great again might prove to be in vain, owing to Washington’s repeated biased measures against China, such as a clampdown on Chinese firms listed on the Wall Street, experts said, noting that such moves dent US’ image of an open and fair global market.

Trump has ordered a probe into the actions of Chinese firms listed on the US stock markets on Friday, as tensions flared anew between the two countries after China's central authorities proposed to implement a security law in Hong Kong. 

Trump said he is instructing his presidential working group on financial markets to study the practices of Chinese companies listed in the US to protect American investors, without disclosing details of steps to follow. 

This could be deemed as another step by the Trump administration to crack down on Chinese companies listed in the US, after the Senate passed a bill earlier that may prohibit many Chinese companies from listing on the stock markets or raising funds from US investors.

The bill stipulates Chinese companies listed in the US must adhere to Washington’s audit standards, and prove that they are not under government control. 

Experts said such prejudiced measures are very “short-sighted,” as they damage the reputation of the US among global investors and companies who used to deem it as an accommodative market. 

“Many companies with plans to seek a listing in the US might stop their plans, and this (the sanctions against US-listed Chinese companies) would exert a relatively large negative impact on the US’ overseas securities business,” said Zhang Hailiang, managing director of J&K Investment. 

Li Daxiao, the chief economist at the Shenzhen-based Yingda Securities, said the US is creating trouble for Chinese companies out of “short-term considerations,” but it would hurt the long-term status of the US financial markets if the US capital markets lose its fundamental appeal of openness and fairness to global investors and companies. 

Trump administration’s move should raise the alarm bell for many Chinese companies listed in the US, including tech giants like Alibaba and Baidu, some of which are already mulling over steps to seek secondary listings in Hong Kong as a countermeasure. US-listed Chinese online gaming giant NetEase confirmed on Friday that it would seek a secondary listing in Hong Kong. 

Zhang also added that the tighter regulation imposed by the US on Chinese companies listed there will prompt some of them to return to A-share markets. 

“Under this situation, the valuations of Chinese companies listed in the US should be suppressed for a long period to come. In comparison, domestic policies are increasingly accommodative to US-listed Chinese firms, while domestic investors also give them higher valuations,” Zhang told the Global Times.

Photo taken on May 26, 2020 shows the Fearless Girl statue in front of the New York Stock Exchange in New York, the United States. The New York Stock Exchange (NYSE) partially reopened its iconic trading floor on Tuesday after a two-month closure due to the COVID-19 pandemic. (Xinhua/Wang Ying)

 
US-listed Chinese shares edged up on Friday despite Trump’s threats. The share price of Alibaba rose by 3.96 percent on Friday, while Baidu saw shares rise by 0.22 percent. 

Apart from cracking down upon US-listed Chinese firms, Trump said the US government would also take action to “revoke Hong Kong’s preferential treatment as a separate customs and travel territory from the rest of China.” 

“Capital, especially investment for the real economy, will seek safe havens. Once the safety of Hong Kong is guaranteed, investors will come of their own accord,” said Mei Xinyu, a research fellow with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, noting that Trump’s decision to revoke Hong Kong's special status will achieve little.

“While the US politicians are keen on political game, China is steadily moving forward its COVID-19 vaccine research and development, and gradually resuming its productions; anyone with common sense would comprehend who will win the game,” Mei told the Global Times.