In Depth: Two Winners Emerge From the China Concept Stock Crash

This is the third story in three-part series on how last month’s crash in China concept stocks left venture capital and private equity investors reeling. Get caught up by reading part one and part two.

Two winners have emerged from last month’s crash in overseas-traded Chinese stocks — state-owned funds and holders of mainland stocks.

Typically, when there is a broad drop in the shares of Chinese companies listed in Hong Kong or elsewhere abroad, stocks in Shanghai and Shenzhen fall right along with them. But the slump in overseas-traded Chinese stocks that began last year and culminated in March’s crash wasn’t mirrored in the mainland markets. From the middle of February 2021 to the end of the following August, mainland stocks fell by only about half as much as the shares of Chinese companies traded in the U.S.