Chinese stocks have faced a number of headwinds since the February stock market high.

  • Chinese regulation around consumer protection
  • A Cathie Wood sell-off
  • Now a Gensler warning on a lack of transparency a shell-company risks (the SEC Chairman)

This is basically American forging a capital war attack on China. Gensler said in a video message that there is a lot that American investors don’t know about some Chinese companies that are listed on U.S. stock exchanges. His remarks come just weeks after the regulator halted initial public offerings of Chinese companies until they boost disclosures.

The Chinese Government also appears to be focusing in on Chinese Tech firms with lucrative positions on the U.S. stock market, even as more Chinese companies double-list or go IPO in Hong Kong.

Bloomberg reported Gensler said that he’s asked SEC staff to take “a pause for now” in green-lighting IPOs of shell companies that Chinese firms use to list shares in the U.S. and wants investors to have more information. He also repeated his warning that U.S. officials must be allowed to inspect Chinese firms’ financial audits (data taken from short interest API).

So Chinese ETFs are massively down and so are some bigger names, let’s take a quick look at their 6 month positions.

  • JD.com = Down 37.62% in last 6 months to $66.67 (P/E = 13)
  • Baidu = Down 41.79% in the last 6 months to $146.70 (after being a woodstock favorite due to the AI focus) (P/E = 7.5)
  • Alibaba = Down 32.43% in the last 6 months to $180.40 (P/E = 22)
  • KWEB (Chinese ETF) = down 55.31% in the last 6 months to $46.28
  • Pinduoduo = down 59.46% in the last 6 months to $82.22.
  • Nio = down 32.62% in the last 6 months to $38.62
  • YINN (Chinee ETF x3) = down 62.14% in the last 6 months to $12.02.
  • Bilibili = Down 52.70% in the last 6 months to $69.46.
  • Didi (IPO late June, 2021) = Down 42.64% since IPO. (Fine is coming!)
  • Mogu = Down 69.70% in the last 6 months to $1.00.
  • Qudian = Down 59.59% in the last 6 months to $1.52.

If you assume that Chinese companies will be the fastest growing in the next twenty years, hard not want to get in a future upcoming ByteDance IPO and in on some of the best names at the low. Ray Dalio like me is a contrarian here against the market since obviously Chinese BigTech have fundamental growth stories.

There are any number of other Chinese stocks we like such as Xpeng, and meanwhile the Wall Street bubble just keeps getting bigger with a liquidity avalanche stoking American greed and a pandemic pyramid play of the ultra elite from everything from Dogecoin to an inflated S&P that can only go up.

However, you may want to wait for the Western stockmarket bubble to tank, before picking these up (literally off the ground).

With more antitrust regulation by China, some of these stocks will go down further as we can see today with the pre-market sell-off mirroring Asian markets.