Shein’s Hong Kong IPO, 50% Tariffs on Copper? & Why China is Winning the EV Race

Summary

Prof G Markets: Shein’s Hong Kong IPO, 50% Tariffs on Copper? & Why China is Winning the EV Race
Released on July 9, 2025
Host: Scott Galloway and Ed Elson, Vox Media Podcast Network

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1. Market Overview: Tariffs and Their Impact

Ed Elson opens the discussion by addressing the tumultuous state of the capital markets following President Trump's recent tariff announcements.

• Trump’s Tariff Announcements:
  On August 1st, Trump declared a 50% tariff on copper imports and hinted at additional sector-specific duties. This led to an immediate 13% surge in copper prices, reaching a record high. However, the timing and implementation remain uncertain. As Ed notes, “when will the tariff go into effect? Well, we don't know” (04:45).

• Pharmaceutical Tariffs:
  Trump also threatened a 200% tariff on pharmaceuticals, stating he would be “announcing something very soon” (05:20). Despite the intensity of these announcements, there is skepticism about their actual execution, especially given the conflicting timelines previously mentioned.

• Market Reaction:
  The major indices, including the S&P and Nasdaq, closed nearly flat, while the Dow saw a slight decline. Renewable energy stocks dipped after stricter eligibility criteria for clean energy tax credits were announced. Ed summarizes the situation: “More talk and still no action” (07:50).

2. Shein’s IPO Journey: From London to Hong Kong

The conversation shifts to Shein, the Chinese fast-fashion giant, and its persistent efforts to go public.

• IPO Filings and Challenges:
  Shein initially attempted to list on the U.S. market in 2022 but faced SEC scrutiny due to concerns over its supply chain ties to Xinjiang, a region associated with forced labor practices. Subsequently, Shein filed for an IPO in London, gaining approval from UK authorities but facing backlash from Chinese regulators over its disclosures on supply chain issues (09:10).

• Switch to Hong Kong:
  Facing regulatory hurdles in both the U.S. and the UK, Shein has now opted to file for its IPO in Hong Kong. Ed highlights the strategic move: “Maybe they wanna put some pressure on the London Stock Exchange and they want to force the UK into compromising with China” (10:20).

3. Hong Kong IPO Boom: A Surge in Listings

Alice Hahn, China economist and director at Greenmantle, provides deeper insights into the booming IPO market in Hong Kong.

• Policy Support from Beijing:
  Beijing is actively encouraging Chinese state-owned and private companies to dual list in Hong Kong, enhancing the attractiveness of the Hong Kong Stock Exchange (HKSE) (12:00).

• Investor Demand:
  Both mainland and foreign investors are increasingly seeking exposure to Chinese tech and AI sectors through Hong Kong due to its robust regulatory framework and the stability of the Hong Kong dollar, which is pegged to the U.S. dollar, offering additional diversification (12:50).

• China’s Economic Optimism:
  There is a growing bullish sentiment about China’s tech sector, particularly driven by advancements in AI and supportive policies from Beijing, fueling record-high IPO activity (13:10).

• Implications for Other Markets:
  This surge in Hong Kong contrasts sharply with declining IPO activities in the U.S. and the UK, suggesting a potential shift in global financial centers. Alice notes, “The Hong Kong Stock Exchange outperforms some of these other stock exchanges” (14:00).

4. Shein’s Chinese Ties: A Controversial Issue

Ed Elson delves deeper into the controversy surrounding Shein's national identity and regulatory approvals.

• Debate Over National Identity:
  Despite Shein’s claims of being a Singaporean company with no ties to the Chinese Communist Party (CCP), critics like Ed argue that the necessity of Chinese regulatory approval for its London IPO suggests persistent Chinese influence: “This was China’s call. And as much as Shein might want to distance itself from China, probably to make it more marketable to investors, I don't really know that is the reality of the situation” (16:30).

• Marco Rubio’s Concerns:
  U.S. Senator Marco Rubio had previously sought to block Shein’s U.S. IPO, citing the need for greater disclosure about its operations and supply chain ties to China, particularly Xinjiang (15:45).

• Scott Galloway’s Perspective:
  Host Scott Galloway, an investor in Shein, counters the criticisms by emphasizing Shein's efforts to distance itself from China’s political influence, though Ed remains skeptical about the true extent of Shein’s independence (16:05).

5. China’s Dominance in the Electric Vehicle (EV) Market

The discussion pivots to the electric vehicle (EV) industry, highlighting China's rapid advancements compared to the U.S.

• Tesla’s Challenges:
  Ed points out that Tesla’s stock is under pressure following Elon Musk’s announcement of forming a new political party, raising concerns about his divided focus: “Investors are worried that Elon is getting distracted with politics again instead of focusing his time and his energy on running Tesla” (18:00).

• China’s Strategic Investments:
  Michael Dunn, founder of Dunn Insights, explains that China’s proactive strategy, initiated in 2015, aimed at leading in tomorrow’s technologies has resulted in a tenfold increase in EV and battery production compared to the U.S. Today, China builds approximately 12 million electric cars annually, while the U.S. produces around 1 million (20:10).

• Policy Contrasts:
  While China continues to expand its EV subsidies and infrastructure, the U.S. is witnessing legislative moves that reduce investment in clean energy and favor traditional gasoline and diesel vehicles, further entrenching the U.S. in a defensive stance: “China has been playing offense for years and meanwhile the US is currently just playing defense” (22:00).

• Implications for the Future:
  This disparity not only affects current market standings but also has broader implications for national security and technological leadership, as batteries are pivotal for various advanced technologies (24:00).

6. Conclusion: Navigating a Capitalist Landscape Dominated by Shifting Powers

Ed Elson wraps up the episode by underscoring the critical insights discussed:

• Uncertain Tariff Policies:
  Despite significant tariff announcements, the lack of clear implementation timelines leaves the market in a state of flux, with minimal immediate impact on major indices.

• Shein’s Strategic Moves:
  Shein’s persistent attempts to secure a stable IPO location reflect broader geopolitical tensions and the intricate balance between regulatory environments in different regions.

• Hong Kong’s Rising Influence:
  The explosive growth of the Hong Kong IPO market signifies a potential shift in global financial dynamics, positioning Hong Kong as a pivotal hub for Chinese and international companies.

• China’s EV Supremacy:
  The clear lead that China holds in the EV sector, driven by strategic investments and supportive policies, poses significant challenges to American dominance in the automotive industry.

Ed concludes, “American dominance in the auto industry is fast becoming a thing of the past” (26:50), highlighting the necessity for the U.S. to innovate and adapt to maintain competitiveness in key industries.

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Notable Quotes

• Ed Elson on Tariffs:
  “More talk and still no action” (07:50).

• Alice Hahn on Hong Kong’s IPO Surge:
  “There are a couple of factors at play, I think. Number one, there has been a positive policy tailwind from Beijing...” (12:00).

• Scott Galloway on Shein’s National Identity:
  Referenced indirectly through Ed’s analysis.

• Michael Dunn on China’s EV Strategy:
  “China accounts build more electric vehicles and more batteries than all other countries combined” (23:08).

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Key Takeaways

1. Tariff Uncertainty:
   President Trump's tariff announcements have created volatility in specific markets like copper, but overall market indices remain largely unaffected due to the unclear implementation timelines.

2. Shein’s IPO Strategy:
   Shein’s shift from U.S. to London, and now to Hong Kong, underscores the complexities of navigating international regulatory landscapes, especially for companies with ties to regions like Xinjiang.

3. Hong Kong’s Financial Ascendancy:
   Driven by supportive policies and investor demand for Chinese market exposure, Hong Kong is emerging as a premier destination for IPOs, potentially overshadowing traditional markets like the U.S. and the UK.

4. China’s EV Leadership:
   China’s decade-long strategic investments in electric vehicles and batteries have positioned it as a global leader, challenging American automotive supremacy and necessitating significant policy and innovation shifts in the U.S.

5. Geopolitical Influences on Markets:
   The intertwined nature of geopolitical relations and financial markets is evident in the Shein IPO saga and the competitive dynamics in the EV sector, highlighting the importance of international cooperation and strategic policy-making.

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For those navigating the complexities of today's capitalist society, understanding these market dynamics is crucial for building financial literacy and security.

Transcript

[Sally]

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[Alice Hahn]

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[Ed Elson]

Today's number 85 million. That's how many Lego pieces were used to build Legoland Shanghai, which just opened up this week. That makes it the largest Legoland in the world and also the second largest stockpile of synthetic assets in Asia. The number one is steel SoftBank.

[Sally]

Money markets matter.

[Ed Elson]

If money is evil, then that building is hell.

[Alice Hahn]

The show goes on. Sell.

[Ed Elson]

Welcome to Property Markets. I'm Ed elson. It is July 9th. Let's check in on yesterday's market vitals. The major indices ended the day mixed after Trump said there would be no exceptions to his August 1st tariff deadline. We'll talk more about that in a second. The S and P and the Nasdaq closed nearly flat, while the Dow fell slightly. The yield on 10 year treasuries rose and renewable energy stocks fell after Trump announced stricter eligibility requirements for clean energy tax credits. Okay, what else is happening? Trump announced a 50% tariff on copper imports and signaled that more sector specific duties are on the way. The market responded accordingly, with copper prices jumping 13% to a record high after the announcement. He also threatened to impose a 200% tariff on pharmaceuticals, stating that he'd be quote, announcing something very soon. Trump clarified that the tariffs were would not take effect immediately, giving Companies up to 18 months to reshore supply chains. This news comes after he decided to push his original July 9th deadline to August 1st. Remember the 90 day tariff pause which was supposed to end today? Well, that will now end in three weeks. Trump later added in a cabinet meeting yesterday that that change, quote, wasn't a change, but that it was, quote, a clarification. He also changed his tune on the strictness of that Aug. 1 deadline. At first he called it quote, firm, but not 100%. But then yesterday he said that actually, no, there will be no further extensions to that deadline. Okay, so we have a new tariff. Copper 50%. Copper prices rose 13%. Record high. That's probably a big deal. When will the tariff go into effect? Well, we don't know. Howard Lutnick said maybe the end of July, maybe August 1st. Trump said he was gonna give 18 months. In other words, we actually have no idea when this copper tariff will even happen or if it will even happen, as we've seen countless times. I mean, you just can't really take Trump's word when he makes these threats about tariffs, which is honestly why I was a little surprised by how the price of copper reacted. We also have no idea if those pharmaceutical tariffs will happen. That one was really soft. And as for all the other Liberation Day tariffs, well, we have no idea when those will happen either. He said August 1st, but before that he was saying it was July 9th. That was the 90 day pause. And then he said August 1st was a soft deadline, but now it's a hard deadline. In sum, no one actually knows. In the meantime, we should probably check in on our deal progress. Remember, Trump said over the weekend that he would be announcing trade deals this week? He said, yes, that we were going to see some tariff letters, but remember he said and or trade deals. So let's just check in on how many deals we've secured so far. We are at 0.0deals. So no deals. Maybe some tariffs, we'll see, but again, not really sure. And then an extension on the tariff deadline, which, by the way, he keeps on saying, oh, it wasn't a change. This was just a clarification. But the more I look at the situation, the more it is becoming clear to me that basically nothing has gotten done this week. And this is the same thing we keep on seeing time and, and time again. There's a lot of headlines, there's a lot of stuff that it feels like we have to cover. 50% tariffs on copper, that is a big deal. But over and over again, none of these deals or these negotiations or these tariffs, none of them really have any consequence. They don't really mean anything. And yeah, we saw that increase in the price of copper. But you look at the overall stock markets, you look at the S and P, you look at the nasdaq, you look at the Dow, the, the markets largely shrugged. So this feels again like this is the taco trade at work. We will see. But what is clear to me right now is Trump has said a lot of stuff, he's sent out a lot of letters, he's said a lot of stuff about these tariffs, but ultimately nothing has really changed. It's July 9th today. This was supposed to be the end of the tariff pause, but no, that's not gonna happen anymore. Apparently it's gonna happen August 1st, but who knows if that's gonna happen either? So I don't have much to tell you here. We'll keep on checking in on this, but as of now, I don't think there's much to say. More talk and still no action. Shein has filed to go public in Hong Kong. A fast fashion retailer filed the prospectus privately with the Hong Kong Stock Exchange last week. This is a significant turnaround from their London IPO filing, which they filed about 18 months ago and which we have discussed on the podcast before. So Sheehan possibly switching from London to Hong Kong. I think we should quickly just review the Sheehan IPO story, which we have been following for a long time. As a reminder, Shein is the fast fashion retailer that was started in China, but that is now headquartered in Singapore. Their supply chain is still mostly in China, but they say they are a Singaporean company. They sell extremely cheap clothes, mostly to people my age, mostly to Gen Z. And in the past few years they have been kind of crushing it. Last year they did $38 billion in revenue, up 20% from the year before. Now, for the past three ish years, they have been trying to go public. That's been their big goal. But each time they try, they've gotten a lot of pushback, mostly because of their ties to China and also because of their supply chain practices. As I have flagged on the podcast before, there has been some evidence that Shein sources their products from Xinjiang, which is a very important location for forced labor camps in China. And while Shein has tried to address this, it's still just, you know, not a great look. So every time Shein has tried to go public, usually some government authority has stepped in and said, hold on, we need to review this. So first they tried to go public in the U.S. they submitted that filing in 2022. They were later told that they were going to receive scrutiny from the sec, at which point they decided to pivot. Then two years later, they filed for an IPO in London. And the UK authorities actually approved that filing. But interestingly, the Chinese authorities did not accept it. Supposedly, China had issues with how the filing discussed those very supply chain issues with Xinjiang that I just discussed. But the UK said, no, those are important disclosures, and those disclosures need to stay in. So now, amid this argument between China and the uk, now Shein is saying, okay, well, we're gonna go public in Hong Kong. That might be because they actually do wanna go public in Hong Kong. It also might be because they wanna put some pressure on the London Stock Exchange and they want to force the UK into compromising with China and to ultimately let them go public in London. Remember, it's been actually quite a bad time for London in terms of the IPO markets. Fundraising this year has fallen to a 30 year low. So the London IPO market is drying up. And there is an argument to be made that maybe the London IPO market needs Shein. Maybe they can't afford to let another big IPO go somewhere else. So that's what's happening to Shein right now. Now, the other side of this is what is happening in Hong Kong, and that is that the Hong Kong IPO market is having this unbelievably explosive rise right now. So far this year, more than 200 companies have applied to go public on the Hong Kong Stock Exchange. That is a record high for Hong Kong. The previous record was set in 2021 when 189 companies filed in the first half. But you also have to remember that was a record year for all IPO markets, especially the US because we had this zero interest rate environment. We had the SPAC boom. And, you know, all around the world, there was just a lot of demand for new IPOs. But what we have right now in 2025 is a waning IPO market in America and in the UK and across Europe. And yet, while that is happening, the Hong Kong IPO market is exploding. And that is Strange. So for more on what's going on in Hong Kong, our producer Claire spoke with Alice Hahn, China economist and director at greenmantle.

[Alice Hahn]

There are a couple of factors at play, I think. Number one, there has been a positive policy tailwind from Beijing in the sense that Beijing is now actively encouraging Chinese state owned companies and companies to dual list, meaning to do an H share listing in Hong Kong in addition to the mainland. That has created more impetus for listings in the Hong Kong ecosystem. Number two, mainland and foreign investors alike are trying to get a version of China exposure, especially on the China tech and AI side, and they are opting largely for Hong Kong in order to do this. Hong Kong has a better regulatory framework, a more trusted financial ecosystem for foreigners, and the Hong Kong dollar itself is pegged to the US Dollar, which gives more diversity for even mainland investors who are looking to find diversification in currency exposure outside of onshore markets. And number three, I would say is really a story about China. People getting more bullish about China. There are obviously structural issues, but sense that the market is starting to see the beginnings of potentially a tech bull market on the mainland, largely driven by AI and positive policy support from Beijing. So I think for those three reasons we're seeing a record activity and record listing in the Hong Kong market. All of this is good news for Hong Kong. Who is the loser in this situation? I wouldn't say that the mainland is directly the loser, but certainly on the margin it means that there will be less interest in getting Chinese exposure through mainland stocks. I could see the HK Stock Exchange outperform the mainland CSI 300 index. So these are the mainland Shanghai Composite Index. Secondly, I think other, and certainly this is the case for the US too, other markets are going to see, I think, underperformance potentially relative to Hong Kong. Certainly we started to see this more recently independently of the Hong Kong story in London where you've seen record declines in listing, but also a lot of people delisting from the London Stock Exchange. So I could see a scenario in which the Hong Kong Stock Exchange outperforms some of these other stock exchanges. The big question mark is over the US Stock Exchange. We haven't seen a real decline in performance as of yet, but certainly Trump's erratic policies are taking a hit and reducing investor confidence, potentially also reducing the cadence and speed at which companies are listing in the US in the short term, it probably incentivizes these Chinese companies like Shein, who would have otherwise listed in London or potentially even the US to actually opt to list first.

[Ed Elson]

In Hong Kong, that was Alice Hahn, one of our favorites on the program. Just going back to Sheehan, one thing I would flag here. There's been a lot of debate over whether Shein is a Chinese company. This has been the big concern with the US ipo. That was the concern that was raised by Marco Rubio, who sought to block that IPO because he believed that we needed more disclosures about the business and specifically its ties to China. And I once brought that up to Scott, who, by the way, is an investor in Shein, and he made the point that, no, it isn't a Chinese company. They moved to Singapore, they cut ties. They don't have ties to the ccp. So all of this concern from Marco Rubio and from regulators like him, this is all kind of much ado about nothing. And by the way, that is the claim that Shein made, too. Well, I would just note that for a company that isn't Chinese, that supposedly isn't Chinese, it is very unusual that in order to go public in the uk, they need to get approval from the Chinese government. That is just strange. I mean, if this company is truly separate from China, if it is truly Singaporean, as they so often claim, then they shouldn't need the Chinese Securities Commission to give them their blessing. They should just go public in London. They got the approval, but they're not doing that. And they're not doing it because they need China to give them the green light. Put another way, this company that keeps on telling us that it isn't controlled by the CCP is in fact, actively being controlled by the ccp. That is what is happening in front of our very eyes right now. That is what is influencing this ipo. So, you know, before Shein comes out with some press release, which I'm sure is gonna happen, about how difficult the regulatory environment is, how difficult the London Stock Exchange was, how they had maybe these unfair regulations, they didn't want these Chinese companies, et cetera, et cetera. I'm sure they're gonna say that. Before that happens, let's just remember why Sheehan didn't go public in the uk it wasn't because the UK Denied it. That's not what happened. It was because China denied it. It was because China didn't like whatever that prospectus said about their Chinese supply chain and their ties to Xinjiang. In other words, this was China's call. And as much as Shein might want to distance itself from China, probably to make it more marketable to investors, I don't really know that is the reality of the situation. It is a Chinese company. Yes it is based in Singapore, but clear they are influenced by China and all those products are made in China. We'll be right back after the break. And for even more content, check out our latest Prof. G Markets newsletter where our team shares how you can be irreplaceable in the age of AI. You can find it in the Show Notes or [e-mail] subscribe stay with us. Foreign.

[Sally]

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[Ed Elson]

We'Re back with Prof. G Markets. Tesla stock is still under pressure after Elon Musk said he would form a new political party. Investors are worried that Elon is getting distracted with politics again instead of focusing his time and his energy on running Tesla. And that makes sense. As you will recall, Tesla had a big rebound when Elon said he would be returning to the company full time. And now that that return has been called into question, the stock has fallen back down. Now, I don't think this needs that much analysis. It's been covered plenty by the media and the story has gotten a lot of attention. But there is another side to this that is getting less attention and that is the extent to which Tesla, and by extension America, is losing ground in the EV race to China, not just in terms of stock performance, but also in terms of fundamental business. Tesla deliveries are of course in decline. We've talked about that. But at the same time you've also got a GOP bill that is cutting off investment into electric vehicles. All the while the Chinese government is doing the opposite. China actually extended its electric vehicle subsidy program this year, and over the past decade the government has invested more than $230 billion. And now, just as Tesla is beginning to decline, China is reaping the benefits. According to the Chinese Car association, in the first half of this year, Chinese EV exports jumped by 48%. And in last month alone, China ships 200,000 electric vehicles, which is more than double what they shipped in the same month last year. Meanwhile, 17 of the top 20 best selling electric vehicles in the world are Chinese. Put another way, China is officially crushing the US when it comes to electric cars. And with this new bill, well, we can only really expect that they will continue to crush us even more. Our producer Claire spoke with auto analyst Michael Dunn for more on this. He is the founder of Dunn Insights.

[Michael Dunn]

Right. So starting 10 years ago, 2015, China's top leadership decided that they were no longer happy playing the role of follower, fast follower to Western technology. They wanted to take the lead. So they put together a blueprint and said in tomorrow's technologies, electric vehicles, batteries, AI chips, China wanted to be the leader, not the follower. And they set aside hundreds of billions of dollars to pursue overwhelming leadership in batteries and electric vehicles. And they've gotten there. Ten years later, today, China accounts build more electric vehicles and more batteries than all other countries combined. To put it into perspective, they'll build about 12 million cars, electric cars. This year, America will be lucky to build 1 million. So they're 10 years and 10x ahead of us on electrics. That's how they got there. That's what we're confronting as a nation.

[Alice Hahn]

It sounds like essentially China has been playing offense for years and meanwhile the US is currently just playing defense.

[Michael Dunn]

That's right. We find ourselves in that uncharacteristic, not American position of being on the defensive and being the underdog and needing tariffs to protect ourselves. So what's going on? I think one way to think about it is that all things being equal, say we said, okay, China wants to go electric vehicles in the future and we're happy doing gasoline and diesel, fine. But the trouble with that is if we look at future technologies, from drones to humanoid robots to AI, all of these components, all these future weapons and tools are powered by batteries. And without batteries, we're just sunk. And without EVs, we have no reason to build batteries here. So it's almost as if, never mind if you like electric vehicles or not, as a nation, we need to have batteries and battery supply chains for national defense, national sovereignty, and to be competitive in electric vehicles too.

[Alice Hahn]

What do you think we need to see from the US If America is going to be able to keep up with China in EVs as an American.

[Michael Dunn]

From Detroit I would love to see the Detroit three hold their own, compete with the Chinese. But to get there, we are going to have to make some monumental changes in the way we compete. So, for example, the average cost of a new car in America this year is close to $50,000. In China, it's less than half that. Chinese can make cars that start at $12,000. We're not even close to that. So we have to rethink what it means to be competitive into the future. And that means making some serious changes in the way we think about paying ourselves, including people on the line, including management. We are the high cost producer right now and that doesn't hold for long in any industry.

[Ed Elson]

So this is obviously an ongoing story and it's a big one and it's one that we're going to be keeping very close tabs on throughout the year. But the through line is becoming clearer and that is that when it comes to EVs, when it comes to electric vehicles, China is winning. And this might have been a debate in the past, it might have been a debate when Tesla was rising and when our government was investing further into clean energy and into electric vehicles. But at this point, it's not a debate. Today, BYD has overtaken Tesla and you look at the numbers, Beijing has overtaken Detroit. And with this new government bill, which, remember, goes short on clean energy and doubles down on gasoline, just as Michael says, the picture is getting a lot clearer now. American dominance in the auto industry is fast becoming a thing of the past. Okay, that's it for today. Thanks for listening to Property Markets from the Vox Media Podcast network. I'm Ed Elson and I'll see you tomorrow.

[Alice Hahn]

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