China’s EV Stocks Are Getting a Giant Boost From the Government

A big reason all shares are higher, and Chinese shares are outperforming, is China itself. Top government officials said agencies should pursue policies that are favorable to the market.

Hong Kong’s

Hang Seng Index
rose more than 9% in Wednesday trading.

News of support is all it took to help the badly beaten-up Chinese EV stocks. Coming into Wednesday trading, the three stocks were down an average of 50% year to date and 61% from 52-week highs.

Demand for EVs hasn’t really been the problem. Instead investors started to worry that the stocks could be delisted from U.S. exchanges after the Securities and Exchange Commission cited five companies–none of the EV firms were listed—that didn’t meet U.S. accounting and auditing standards. If U.S.-listed Chinese firms don’t comply with U.S. standards they could face delisting from U.S. exchanges in coming years.

None of the three Chinese makers responded to a request for comment about compliance with standards. They have said in the past that they were, or were preparing to be, compliant with U.S. standards.

China’s support for the its domestic economy looks to be the biggest factor boosting stocks, but there is other good news too. Investors appear pleased that talks between Russia and Ukraine are making progress. Ukraine President Volodymyr Zelensky indicated Russian demands are getting “more realistic.” The two sides spoke Tuesday and were due to speak again Wednesday.

Deutsche Bank analyst Edison Yu wrote recently that China’s implicit support of Russia in the current conflict was a cause of some of the recent selling pressure in the Chinese EV names. An end to the conflict would remove another overhang for the stocks.

Write to Al Root at allen.root@dowjones.com