China Stock Losses in U.S. Top $1 Trillion on Delisting Fear

(Bloomberg) — A brutal 2021 selloff for Chinese stocks trading in the U.S. has now erased more than $1 trillion in value since February and shows no signs of easing as regulators on both sides of the globe continue to put pressure on the firms.

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The Nasdaq Golden Dragon China Index — which tracks China-exposed firms listed in the U.S. — plunged 9.1% on Friday, the most since 2008, after Didi Global Inc. said it plans to delist its shares from the New York Stock Exchange. The slump came amid a broader drop in equities on the day, with technology shares bearing the brunt of the decline.

Read more: Didi Begins Plan for U.S. Delisting, Hong Kong Share Sale

The Didi announcement marks a stunning reversal of fortunes after the firm raised $4.4 billion in an initial public offering in late June, and adds even more uncertainty to the prospects for other U.S.-listed Chinese firms. Didi fell 23% at its weakest on Friday, extending the ride-hailing giant’s slump to more than 50% below its $14 IPO price.

“It’s sad to see what’s going on” with Didi, Edith Yeung, general partner of Race Capital, said in a Bloomberg Television interview. “When you consider a lot of Chinese companies are walking on egg shells to please the Chinese government, to please the U.S. government,” she said, expecting more to join Didi in shifting toward a Hong Kong listing.

Here’s a look at how China stocks in the U.S. have fared amid the increased scrutiny:

Policy Pressures

Friday’s selloff adds to what has been a historically bad stretch for Chinese stocks trading in the U.S. The Nasdaq Golden Dragon China Index has dropped 43% this year, putting it on pace for its worst annual performance since 2008. An unrelenting wave of policy crackdowns by both Beijing and Washington has resulted in eight separate trading days with declines of at least 5%. To put that in perspective, the S&P 500 Index has only experienced five such declines over the last decade.

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