If such a move does happen, it would have a major impact on China's technology innovation boom. Stocks of many Chinese tech companies dropped on Friday as the news caused jitters among investors. The backdrop is an escalating US-China tech conflict over China's rising influence and power in the technology world and growing protectionism and regulations by the U.S. to push back China and keep America in the global leadership stance.
An increasing number of Chinese tech companies have gone public in recent years in the U.S. In 2018, 31 Chinese companies raised $8.5 billion on the New York Stock Exchange and Nasdaq out of a total 190 U.S. IPOs that pulled in $47 billion. The year before, in 2017, 16 Chinese companies raised $3.3 billion.
WeWork arrived in China in 2016, looking to the market as an attractive growth opportunity. Now with the halt of its U.S. IPO, its China business may face a cash crunch at a time when a charged up Chinese competitor,
Ucommune, is aiming for its businesses.
The U.S. co-working outfit jumped right into China's booming office-share market, forming a standalone entity
WeWork China, and plotting acquisitions and expansion, supported by mega funding. Within two years, WeWork bought Chinese co-working startup
nakedHub from Shanghai-based luxury resort operator
Naked Group for a cool $400 million, then scooped up 25 nakedHub locations in Beijing, Shanghai, and Hong Kong, to add to its own 13 spots in China.
Adam Neumann took a money-making lesson from nakedHub's operation in trendy Xintiandi: renting office space on a flexible, come-as-you-like basis, with no monthly contract.
WeWork quickly launched the feature as
China's co-working market has taken off with the entrepreneurial boom, but the office sharing space is now over-crowded with many fumbles. Look for WeWork and its key challenger Ucommune to fight it out.