Chinese tech giants like Kuaishou are listing in Hong Kong instead of U.S. after Trump’s trade war – CNBC

From left, the flags of the Hong Kong Stock Exchange, China and Hong Kong are seen flapping in the wind on May 6, 2019.

Anthony Wallace | AFP | Getty Images

Venture firm DCM just generated a $16 billion return from the IPO of Chinese social media app Kuaishou. The listing took place in Hong Kong rather than in the U.S., and DCM co-founder David Chao expects China’s most prominent tech start-ups to follow suit.

The primary reason, Chao says, is four years of the Trump Administration’s “political bashing” of Chinese companies.

“You’ve had this heightened adversarial relationship between the U.S. and China,” said Chao, whose 25-year-old firm backs start-ups in the U.S., China and Japan. Between Trump’s pounding of Huawei and promise to delist some Chinese firms, “that really made Chinese companies rethink about going public in the U.S.,” Chao said.

In the past, U.S. exchanges have been highly competitive in luring top Chinese companies. The country’s two biggest e-retailers, Alibaba and JD.com, went public on the Nasdaq in 2014. They were preceded years earlier by internet company Baidu, gaming platform NetEase and travel site Ctrip (now Trip.com).

But the trend has shifted away from the U.S., as China’s biggest tech successes choose to stay closer to home. Hong Kong is the world’s fourth-largest exchange in terms of total market cap of listed companies, trailing the New York Stock Exchange, Nasdaq, and the
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