Chinese companies are opting for listing on the US stock exchange, hoping for tough listing rules in the domestic market and higher valuations. In the first half of 2025, 36 Chinese companies reportedly went public in the US. This follows a record 64 companies in 2024.
Most companies avoid the long and arduous stages of IPO processes by going public through SPACs (Special Purpose Acquisition Companies).
There are currently more than 40 Chinese companies that have applied to be listed on Nasdaq.David Bartz of K&L Gates said, “This year will be a healthy IPO year for Chinese companies. It could be a record year.” Chinese companies prefer the US stock exchange due to the difficulty of going public in the domestic market because of strict regulations in 2023 and the deeper capital pool of the US.
Xinghui Car Technology has taken a big step towards being listed on the US stock exchange. The company’s CEO celebrated the agreement signed to be listed on Nasdaq. “The US capital market is one of the largest in the world. It has high liquidity and provides easy access to financing,” said Xinghui Chairman Song Wenfang.
SPAC Rise and Chinese Companies
More than 100 Chinese companies listed on the US stock exchange are noteworthy, with a total market capitalization of $1 trillion. IPOs conducted via SPACs doubled last year, rising from 57 to 76. This year, startups, especially in the technology sector, that are not profitable or even generating no revenue are looking for faster ways to raise capital.
However, this rising Chinese demand has caught the attention of US lawmakers. In May, there were calls to delist Chinese firms due to security concerns. Furthermore, the SEC has taken steps to increase transparency requirements, targeting China.
Domestic Market Obstacles
While companies in China need to meet challenging conditions such as high size or profitability for an IPO, the IPO process is easier in the US due to objective rules. Chinese startups are turning to the US because of long regulatory approval times and high listing thresholds. These processes take 9-12 months in China, 6-9 months in Hong Kong, and only 4-6 months in New York.
As a result, Chinese entrepreneurs see the US stock market as a faster and more convenient option.
