China Strategy: Navigating VIE And ADR Risks

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China prohibits foreign investments in certain industries Variable Interest Entity VIE is a popular business structure that Chinese corporates use to accommodate foreign capital in those restricted industries Chinese regulators have recently vowed to tighten regulations on American Depositary Receipt ADR listings most of which are in VIE structures At the same time US regulators are likely to delist Chinese ADRs after three years of non-compliance with the accounting standards set by the PCAOB unless China and US reach a resolution before the deadline What are the various risks of VIE structures and Chinese ADRs What are our recommendations for investors Find out more in this episode with Mark Matthews Head of Research Asia and Richard Tang Head of Research Hong Kong and China Strategist Click here to visit this podcast episode