Companies go to stock exchanges to raise money, they sell shares to investors, report on their accounts and investors as a group determine if the company is to be held, traded or avoided. The large Chinese companies do the same thing as the large American companies and being on the NYSE is both prestigious and important because of the requirements to be listed and stay listed. The important aspect to Chinese companies is the Chinese government, the companies need to ensure the Chinese government is onside with what they are doing or the Chinese government has levers in can and does pull to ensure the company does what the government desires it do.
In an article by Julie Zhu and Kane Wu of Reuters, the Chinese government after 5 months Didi Global went public on the NYSE, to delist itself and move to a stock listing on the Hong Kong Stock Market.
Didi went public raising $4.4 billion and did a review of its data practices. The Chinese government was not happy with Didi and the Cyberspace Administration of China (CAC) ordered 25 of Didi’s mobile apps to be removed from app stores. The company could not register new users (given a business model built on apps to one of the most heavily cellphone countries in the world, that was not good) The CAC cited national security and the public interest reasons.
Didi apps provide access to ride sharing and in China financial services, as they announced they were moving to Hong Kong, the CAC gave indication the apps to be used for new users is coming very soon
Didi Global’s main shareholders are Softbank’s Vision Fund with 21.5% and Uber Technologies with 12.8%.
Linking to dividend paying stocks, all companies are dependent on the government where their headquarters are. For American companies, you can expect the government to give them flexibility to operate. For Chinese companies, the government is a partner whether it owns shares or not. It is one of the reasons most of are bias towards the country we live in. The bias is good, and most of us have majority holdings of companies head offices which are reasonably close to us even though all companies do business around the world. It is just easier to see government influence in some countries more than others.
There are more questions than answers, till the next time – to raising questions.