Chinese stocks trading in the U.S. rocket higher after China signals support for the shares
Shares of Chinese companies listed publicly in the U.S. surged Wednesday as China on Wednesday signaled support for the stocks.
Regulators from both countries are progressing toward a cooperation plan on U.S.-listed Chinese stocks, according to Chinese state media. The report cited a meeting Wednesday chaired by Vice Premier Liu He, who heads China's finance committee.
The Chinese government supports the listing of companies overseas and said its crackdown on technology companies should end soon, the state media report said.
Alibaba jumped about 20%, JD.com added 24% and Pinduoduo rallied more than 35% in the premarket Wednesday.
The move comes as American depositary receipts of Chinese companies have been beaten down recently amid regulatory and delisting fears. ADRs are shares of non-U.S. firms traded on U.S. exchanges.
The Nasdaq Golden Dragon China index, which tracks the performance of U.S.-listed Chinese stocks, is down 38.8% in 2022 and 69.2% in the past 12 months.
The Securities and Exchange Commission last week named five U.S.-listed ADRs of Chinese companies that failed to comply with the Holding Foreign Companies Accountable Act.
The act allows the SEC to delist and even ban companies from listing on U.S. exchanges if American regulators cannot review company audits for three consecutive years.
Last summer, Chinese regulators stepped up their oversight on U.S.-listed Chinese stocks. Regulators reportedly asked Chinese ride-hailing giant Didi to delist from the U.S. months after the company's IPO.
— CNBC's Evelyn Chengcontributed to this report.
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