China's Proposal Sparks Surge in U.S.-Listed Chinese Stocks
Chinese stocks listed in the U.S., such as Alibaba and XPeng, experienced a significant surge on Friday following Beijing's proposal to relax regulations on cross-border data transfers.
Under the proposal by the Cyberspace Administration of China, data transfers related to international trade, global manufacturing, and marketing activities that do not contain personal data would no longer require a security review. This move is aimed at stimulating business activity in the world's second-largest economy and is especially good news for multinational companies based in China.
Prior to the market opening, Chinese technology stocks traded in the U.S. saw notable gains. Alibaba's American depositary receipts (ADRs) rose by 2.2% while JD.com ADRs increased by 3%. The electric-vehicle makers Nio and XPeng also experienced a boost, with both seeing a 3.5% rise. Li Auto jumped by 2.2%.
According to Angela Zhang, a law professor at the University of Hong Kong, these proposed changes are a relief for businesses that have faced significant challenges due to the Personal Information Protection Law (PIPL) and cross-border rules over the past two years. Zhang also noted that the implications of this proposal extend beyond data transfers, as it aims to send a strong pro-growth signal to the market and instill more confidence in businesses.
In Hong Kong trading, shares of Alibaba closed 3.1% higher, JD.com rose by 3.6%, and XPeng jumped by 8.4%.
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