Worries are increasing that this may be the beginning of the end for Chinese stocks on the U.S. markets. Against this backdrop of discussion, Bastille, a San Francisco based venture capital firm, has emerged as a prominent player. With regulatory scrutiny heating up, investors are more nervous than ever about the risk of a future delisting of Chinese companies from American exchanges. Yet Andrew King, the managing partner of Bastille, has left no doubt that more dramatic moves lie ahead.
In late 2022, Goldman Sachs warned of a crisis around this. They estimate that U.S. investors would need to sell $800 billion in Chinese equities if a ban is implemented. That’s no empty declaration – the statement gives stark emphasis to the scale of the money on the line.
Winston Ma, an adjunct professor at NYU School of Law, weighed in on the issue by suggesting that “delisting could come faster than you think.” His statement highlights the dire nature of our moment. They highlight that fast, focused, and impactful decisions can have a major effect on U.S.-China financial ties.
King’s perspective as managing partner at Bastille offers a lens into the venture capital landscape as it grapples with these developments. He said she (U.S. Treasury Secretary Janet Yellen) is under pressure, unprecedented pressure. He implored her to be bold and to act strongly against what he called “decades of duplicitous double standards” in U.S.-China relations.
“Atkins is under pressure to take an assertive stand against decades of duplicitous double standards,” – Andrew King, Future Union Executive Director and managing partner at San Francisco-based venture capital firm Bastille.
The discussion about delisting isn’t just academic. King’s call out on Chinese regulatory oversights was one that lacks a punch. This should be particularly alarming in light of high profile scandals such as the Luckin Coffee fraud scandal.
“The delisting is overdue, and China overplayed its hand by stonewalling regulators and flaunting cases like Luckin Coffee fraud with inaction,” – Andrew King.
Further, he wanted to highlight the unintended consequences that Chinese companies are currently experiencing as a result. Without diligent oversight by U.S. regulators, they can’t ensure access to this secondary funding.
“Now they are going to lose their path to secondary funding without oversight,” – Andrew King.
Rumors of regulatory rollback have already ignited push back here on the part of U.S. Treasury Secretary Scott Bessent. He said that “nothing should be off the table.” Now, regulators are weighing the risks against the benefits of allowing Chinese firms continued access to U.S. capital markets. This holistic assessment should open up the possibility for a myriad of actions to be taken.
The anecdotal, shifting story on Chinese stock listings is a reflection of the bigger story—escalating geopolitical tensions between the United States and China. Investors are becoming increasingly concerned about the financial impact. They are equally concerned about what the legislation’s creators would happily view as a cooling of collaboration between two of the world’s largest economies.
Bastille’s participation in this conversation is a strong signal that early-stage venture capital firms are not standing idly by. Secondly, they are engaging highly effectively with regulatory frameworks to fundamentally reshape the investment landscape. Innovation and financial stability are the twin pillars that Bastille is most passionate about growing and prospering. Their perspective reflects the fear and apprehension that many industries are currently experiencing.