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OPINION

Chinese IPOs: New York’s loss will be Hong Kong’s gain

In the face of fierce regulatory pressure in Washington and Beijing, it is hard to see many, or any, Chinese firms going public in New York next year.

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2022 should be a big year – the latest of many – for China’s primary equity markets, both onshore and offshore.

Why? For one thing, the ruling Party needs to figure out where its main stock market should be. For years, and rather counterintuitively – given its obsession with control – Beijing has rather muddled along, making things up as it went.

From the 1990s, many of the country’s big state firms were allowed to sell shares overseas, notably in Hong Kong and the US. Digital innovators followed suit, choosing in the main to list on the Nasdaq or the New York Stock Exchange.

It made sense. A US listing connected cool, young mainland firms with clued-in foreign investors. It enabled shareholders to transfer some of their fortunes out of the country. Plus, there was cachet of having your firm’s name running along the Nasdaq’s stock ticker.

Even when former president Donald Trump brought his own brand of China-bashing to the presidency, mainland firms continued to flock to New York. The number of US IPOs by Chinese firms rose from seven – raising a total of $2.19 billion – in 2016, to 34 and $9.2


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