“Is China still investable?” That’s the question that is being debated among global investors in both private and public markets. Not long after China launched an investigation into Didi’s IPO — followed by a policy overhaul of its after-school education industry — the U.S.-listed stocks of Chinese companies went into a tailspin that wiped out more than $1.5 trillion from their combined market capitalization within less than a year.
Moreover, the companies are at risk of being forced off American stock exchanges due to a longstanding dispute over the U.S. Public Company Accounting Oversight Board’s (PCAOB) access to the firms’ complete audit work papers. In recent weeks, Beijing has signaled that it is willing to reach a deal with the PCAOB to prevent such delistings. So, it is not too late to discuss the “investability” question and its underlying assumptions.
