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Opinion
Shuli Ren

The SEC Is Now the Stuff of Chinese Investors’ Fever Dreams

Investors blame US regulators for triggering broad market declines with delisting announcements.

SEC Chair Gary Gensler.

SEC Chair Gary Gensler.

Photographer: Evelyn Hockstein/Reuters

In recent days, I’ve spoken to about half a dozen investors in Hong Kong and New York who blame the US Securities and Exchange Commission for the recent selloff in China’s technology companies. They say they’ve spotted a pattern: provisional delisting announcements by the Washington regulator have tended to precede a drop in the broader market.

On March 10, the SEC identified the first five companies that may be kicked off New York’s stock exchanges in three years, prompting the worst selloff in US-listed Chinese companies since 2008 with jitters extending all the way to mainland China’s $9.7 trillion stock market. The agency added a second and third batch on April 21 and May 4 reversing gains from Chinese economic tsar Liu He’s vow for market stability in mid-March and the Politburo’s promise to support the healthy growth of platform companies — widely seen by analysts as the end of a government crackdown on Big Tech — in late April. China’s attempt to calm sentiment has so far failed.