Will China Cheat American Investors?

Beijing wants to bring home its big tech firms. U.S. shareholders may face undervalued buyouts.

Jesse M. Fried and

Matthew Schoenfeld

Dec. 13, 2018 6:45 p.m. ET

While Washington and Beijing battle over trade, a worrisome cross-border financial link has escaped scrutiny: Americans now collectively own most of the public equity of China’s biggest tech companies, including Alibaba, Baidu and Weibo. This relationship is strange (imagine if the Chinese owned most of Amazon, Facebook and Google). It’s also extremely risky, at least for American investors.

China’s tech darlings began tapping U.S. investors in the early 2000s, when mainland capital markets were unsophisticated and strict...