China’s intention to tighten its supervision of companies listed on foreign exchanges will harm the prospects for listing local companies in the United States and can affect their market value in the future.

On July 6 Beijing announced that it has decided to tighten control over all Chinese companies whose shares are traded on exchanges abroad, as well as change the rules regarding the transfer of data to other countries. A few days earlier, China had also launched an investigation into local tech giant taxi aggregator Didi. The company recently went public on the New York Stock Exchange and faced a 27 percent drop in its share price after a decision of government.

Now the activity of Chinese enterprises preparing for an initial public offering (IPO) will slow down, experts say. Those organizations that are going to go public in the US may have to completely abandon their plans, according to the head of Primavera Capital Group Fred Hu. “The American market is closed, at least for now. The stakes are extremely high, both for technology companies and for China as a country,” he stressed.