Why do mainland Chinese firms refuse to give up on Wall Street IPOs?

Amid heightened geopolitical tensions and complex regulatory hurdles, Wall Street has become a more difficult listing destination for mainland Chinese companies – but some remain unwilling to abandon it. Only two mainland Chinese companies completed US debuts in the first half of the year, raising a combined US$59.5 million – a five-year low for deal volume and total proceeds, according to a June report by accounting firm EY. Official data from the China Securities Regulatory Commission, however, reveals a resilient pipeline. As of July, more than 50 mainland companies were awaiting Beijing’s approval for share sales in the US market. The persistent push raises a crucial question for global investors: why do Chinese entrepreneurs refuse to give up on New York? “A US listing is still seen as highly prestigious,” said Hong Hao, chief investment officer at Hong Kong-based Lotus Asset Management. He noted that New York remained the world’s largest capital market, offering deep liquidity and direct access to an unmatched pool of global institutional investors that regional exchanges could not easily replicate. Behind this appetite persists a formidable regulatory double-bind. Washington has heightened oversight of Chinese issuers through higher barriers to entry for listings and stricter disclosure mandates, while Beijing enforces stringent cross-border gatekeeping through a mandatory filing system centred around national security and data privacy reviews. While these headwinds have driven many mainland firms towards Hong Kong and domestic exchanges in recent years, analysts said New York retained unique advantages – particularly for technology firms seeking growth capital. Valuation remains a decisive factor. Tommy Ong, managing director at T.O. & Associates Consultancy, said US exchanges were generally more receptive to technology-driven start-ups, placing higher premiums on companies tied to the global artificial intelligence boom. By contrast, Ong said valuations tended to be lower in Hong Kong, where “platform company stocks are often perceived as ‘consumption stocks’ with limited tech content”. This view was echoed by Guo Tao, a research fellow at the E-Commerce Research Centre of 100EC. Speaking to domestic media in April after automotive platform Souche Holdings gained Beijing’s filing approval for a Nasdaq listing, he said choosing New York came down to “a fit between market traits and corporate needs”. Guo noted that US exchanges offered higher valuation multiples, deeper liquidity and greater tolerance for early-stage, tech-driven platforms than regional bourses. Souche completed its US initial public offering (IPO) in June, following the January debut of Hong Kong decarbonisation provider Green Circle Decarbonize Technology. Beyond valuation, experts said the drive to list in the US was deeply tied to market liquidity, which was crucial for early shareholders seeking an equity exit. “Many want to cash in,” Hong said, adding that private equity and venture capital funds faced mounting pressure to monetise their stakes and deliver returns to limited partners as fund lifespans neared their end. That liquidity gap made alternative venues like Hong Kong far less attractive for exits, according to Dai Ming, a fund manager at Huichen Asset Management in Shanghai. In a thinner market like Hong Kong’s, Dai noted, even modest insider sell-offs could trigger a steep price collapse or signal a lack of confidence to retail investors. As a result, early backers risked eroding their own paper wealth when trying to liquidate. Despite these traditional advantages, analysts said the fundamental rationale for Chinese companies choosing Wall Street over regional hubs, such as Hong Kong, was narrowing – particularly as the long-held belief that a US listing allows firms to bypass mainland capital controls was no longer a reality. Historically, Chinese technology companies relied on a legal workaround, setting up an offshore variable interest entity shell company – within the broader “red-chip” structure – to house domestic assets and issue shares overseas with minimal onshore scrutiny. However, escalating US-China tensions have reshaped that practice. Amid a broader race for AI and hi-tech dominance, mainland authorities have moved to tighten oversight over this listing structure to restrict capital flight and prevent sensitive domestic data from falling into foreign hands. “I think that is overblown,” Ong said, referring to the idea that founders can still use New York to skirt domestic capital controls. He explained that while short-term anxiety over domestic capital controls could drive some interest towards US exchanges, any capital raised overseas today remained bound by the regulatory requirements enforced by domestic gatekeepers.

Why do mainland Chinese firms refuse to give up on Wall Street IPOs?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}As the first half of 2026 sees record-low US debuts for Chinese firms, CSRC data shows a steadfast pipeline of firms keen to list in the US

As the first half of 2026 sees record-low US debuts for Chinese firms, CSRC data shows a steadfast pipeline of firms keen to list in the US