At least when it comes to many of the Chinese companies listed on the Nasdaq and the New York Stock Exchange. That's because Chinese companies use a structure called a variable interest entity, or VIE, in order to raise money from foreign investorsWhat's a VIE? The second is a Chinese company that holds the licenses needed to do business in the country. First, it's not clear that the contracts that entitle foreign investors to the economic benefits produced by Chinese companies are enforceable. Think about the problem this way: Chinese companies are essentially telling Beijing that they are 100% owned by Chinese citizens.

Source: CNN August 08, 2021 12:33 UTC