$2 Trillion Invested in Chinese Companies, but US Investors Have No Visibility or Control
The Variable Interest Entity structure enables Chinese companies to sell US investors shares in Cayman Island shell companies. Investors have no visibility or control over the real companies located in China.
US investors have no control over the Chinese companies they invested $2 trillion into, because these companies are structured as Variable Interest Entities (VIEs). With VIE, the Chinese companies are registered in Cayman Islands but they are only the shell companies of the real entities in China. Therefore, by owning stocks of the Cayman Island shell companies, US investors have no control over the real companies located in China. DIDI, Alibaba and others all fall into this scenario.
Watch Part 1 of this interview: https://www.youtube.com/watch?v=7bJ1JFZ3xOEh