HONG KONG — Hong Kong’s status as a global business hub has been cast into doubt in recent weeks. But the city has become increasingly attractive to Chinese companies that fear their business prospects in the United States may be in jeopardy.
Gaming company NetEase announced plans this week to raise billions of dollars through a secondary listing of its shares in Hong Kong, following in the footsteps of Alibaba last year. Both Chinese businesses already trade in New York.
NetEase attributed its decision in part to a need for more funding, which it wants to use to expand its business. But it also made clear that it thinks the United States is becoming more hostile for Chinese companies, as regulators and lawmakers consider new rules that would lead to harsher scrutiny. Some restrictions could even make it tougher for companies to go public or keep trading in New York.
The enactment of such rules “could cause investor uncertainty for affected issuers, including us, the market price of our [US shares] could be adversely affected, and we could be de-listed if we are unable to” meet requirements, NetEase wrote in filings to the Hong Kong Stock Exchange.
NetEase’s acknowledgment is a sign of how much the relationship between the United States and China has deteriorated — and how much is at risk for Chinese companies that don’t develop a viable backup plan.