Ban China Stock Listings On US Markets, Says Investing Pro: 'We've Got To Treat China The Way They Treat Us'

Canadian investor and businessman Kevin O’Leary said Chinese companies should be banned from listing on U.S. stock markets until they play be the same set of rules that apply to domestic firms.

Speaking at the Benzinga Fintech Deal Day & Awards on Monday, O’Leary said: “I can’t litigate in China so they shouldn’t be able to litigate here. I don’t know why we let them list any company on our exchanges cause they’re not compliant with our accounting and transparency. We’ve got to treat China the way they treat us.”

When asked if he was calling for a ban on Chinese companies listed in the U.S., O’Leary said: “Yes — that simple. Until you pay the same compliance costs I have to pay to list my company on the NYSE or NASDAQ, you can’t list. What’s wrong with that?”

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Chinese Companies That May Be At Risk

Such a ban would affect more than 250 Chinese companies with listings in New York worth a total market capitalization of just over $1 trillion. These include tech and media giant Alibaba BABA, business services group Pinduoduo PDD, and consumer services groups JD.com JD and NIO NIO.

O’Leary also called for greater transparency in accounting. The Securities and Exchange Commission has also regularly banged this drum and, in December 2022, the Congress-mandated Public Company Accounting Oversight Board said that for the first time, “Chinese regulators had permitted unfettered U.S. regulatory inspections of China and Hong Kong auditors.”

In advance of the PCAOB announcement, five Chinese companies voluntarily delisted from NYSE: Aluminum Corporation of China, China Life Insurance, Sinopec, Petrochina and Sinopec Shanghai Petrochemicals.

Diplomatic Touch May Be Needed

Despite his call for ban on Chinese listings in the U.S., O’Leary said he remained optimistic about future co-operation with China.

“I want to have that market open, I want to do business there. But I don’t want to be screwed.”

But, he admitted, it could take some forceful diplomacy: “They understand the stick — they want the stick — let’s give them the stick. Then when they understand you have a stick, they’ll say ‘let’s work it out.’ These guys aren’t stupid, they need our market, we need their market.”

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