Since early 2015, 47 Chinese companies have received combined offers of $43 billion in funding from private equity houses and Chinese internet giants to delist from American exchanges and make a run for the domestic stock markets. So far 14 of them have delisted and none of them have managed to complete the journey and re-emerge on a Chinese exchange. The sudden desire to rush for the exit represents a swift reversal of a quarter-of a-century flow of Chinese companies to the West. It is the result of two factors: poor performance of many Chinese companies on western exchanges, and the much higher valuations that companies can command in China.
The heady days of double-digit economic growth rates are now history in China, and even achieving 7-7.5% growth is unthinkable. The stock market has been on a roller coaster ride. The Renminbi has fallen dramatically and the trade numbers are down too. Li Wei, Professor of Economics at CKGSB, feels that to solve this China must implement structural reform. The downside: it will be painful. The upside: the Chinese economy will be better off in the long run.
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