Even before TikTok’s troubles, the Chinese company was wary of Washington

Chinese technology companies have looked to the United States as a major market and source of investment. Companies like ByteDance, the company behind TikTok, have attracted major American investment firms such as General Atlantic and Susquehanna Capital. Chinese startups in Shanghai and Shenzhen have seen their initial public offering on the Nasdaq or New York Stock Exchange as a sign of success.

But as relations between Washington and Beijing have hardened, that is changing.

Companies with ties to China now face so much regulatory and political scrutiny that some companies are reconsidering going public or doing business in the United States, investors and the experts. No one wants to end up like TikTok, which has spent years allaying Washington’s concerns about its relationship with China.

Popular startups that investors once considered promising candidates for a US listing, such as fast-track retailer Shein, are looking elsewhere or waiting to list. Others decide not to participate in American companies.

“We’re at a point now where almost no major Chinese technology acquisition by an American company is without serious oversight,” said Geoffrey Gertz, senior fellow at the Center for a New American Security. . Many of these deals dry up early, Mr. Gertz said.

TikTok is not the first tech company with Chinese ties to face intense legal scrutiny in Washington.

In 2019, the Committee on Foreign Investment in the United States opened an investigation into the Chinese company that owns Grindr, a popular dating app for gay and bisexual men. Members of the panel, known as CFIUS, had the same concerns that Grindr lawmakers had about TikTok — that the app could be used to give the Chinese government access to ‘s sensitive data about Americans, including where they live and their dating preferences. CFIUS ordered Grindr’s owner, the Beijing Kunlun Tech Company, to withdraw.

In 2020, CFIUS blocked a Chinese company from forming a joint venture with a US medical robotics company. Last year, President Biden ordered a Chinese cryptocurrency mining company to vacate land in Wyoming near a US military base.

CFIUS has been “laser-focused” on reviewing transactions involving companies with ties to Chinese companies, both small and remote, said Chase D. Kaniecki, a partner at Cleary Gottlieb who specializes in CFIUS reviews.

According to Mr. Kaniecki, China is the main focus of CFIUS, which was established in 1975 because of concerns about the investments of oil-exporting countries in the United States.

More Chinese companies will go public in the US in 2024 than in the previous two years. But last year’s offering raised a fraction of the amount the new listing will raise in 2021, according to data from Dealogic.

A public listing gives companies access to cash they can use to finance their growth. They can also be a windfall for investors who are putting money into early stage startups.

Shein, the Chinese-founded online shopping company, has changed its plans to list its stock in London after US officials raised concerns about its New York filing. Senator Marco Rubio, Republican of Florida, urged the head of the Securities and Exchange Commission to block the listing if Shein refused to share information about his ties to the Chinese government.

A number of Chinese companies that went public in the US last year faced other challenges.

Two private Chinese companies, WeRide and Pony.ai, began trading on the Nasdaq in the fall as the Biden administration prepared rules to ban Chinese ride-hailing companies from using their technology in the United States.

Zeekr, the luxury electric car brand of Chinese automaker Geely, went public on the New York Stock Exchange in May. A few days later, the White House said it was raising tariffs on electric cars made in China.

More Chinese companies are expected to seek US listings during the first year of the Trump administration.

Momenta, a self-driving car company, received approval from Chinese regulators last year to seek an initial public offering in the United States. And Windrose Technology, a Chinese maker of heavy-duty electric trucks now incorporated in Belgium, said it plans to seek a U.S. public listing this year.