US listings point to problems at home

Source:Agencies Published: 2013-1-7 23:08:02

Following a string of accounting scandals that seriously damaged investor confidence in US-listed mainland companies, the tide of Chinese listings on the US market has clearly subsided, with only two Chinese companies going public in the country last year. At the same time, a growing number of US-listed Chinese firms have been pulling up stakes from the US exchanges. For instance, Chinese digital advertiser Focus Media just announced in December that it had agreed to a buyout offer from a consortium of private equity funds.

Many blame short sellers like Citron Research, which stirred market skepticism by issuing questionable reports about the quality of Chinese auditing, for the current situation facing US-listed Chinese companies. Yet, these setbacks point to the fact that the A-share market still has a long way to go before it can become a real developed market that can protect investors' interests.

On the other hand, these Chinese companies themselves are still not strong or mature enough in terms of their bookkeeping and market experience to weather the much harsher foreign market.

The author is Zhou Junsheng, an economic commentator.



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