The economic reform and market opening in China during the 1980s initiated a transformative era for Chinese enterprises. This period ignited their ambition to seek international funding through equity and bond issuance. Even amid robust domestic growth, these firms have consistently pursued offshore listings, particularly to secure investments in stable currencies such as the US dollar. This trend has intensified in recent years, with the Hong Kong Stock Exchange (HKEX) emerging as a crucial platform for these listings.
The recent resurgence of initial public offerings (IPOs) in Hong Kong reflects broader shifts in the global investment landscape. This article delves into the multifaceted forces reshaping the trajectory of Chinese listings, including evolving regulations, the complex dynamics of US-China relations, and significant reforms within the HKEX.
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Transformative changes in the global capital markets
As of 2025, over 300 companies from mainland China have successfully raised substantial funds through international listings, amounting to hundreds of billions of dollars. A notable surge occurred during the COVID-19 pandemic when firms listed on the HKEX raised approximately $50 billion primarily through secondary listings from established US tech giants, such as JD and NetEase.
For many years, the New York Stock Exchange (NYSE) and NASDAQ have dominated the global IPO landscape, collectively commanding a market capitalization exceeding $50 trillion. These exchanges remain the preferred choice for numerous companies, including those from mainland China, drawn by their liquidity and valuation advantages. Nevertheless, the HKEX has sustained its position as a significant player, often ranking among the top three exchanges worldwide in terms of IPO proceeds.
Shifting preferences and regulatory challenges
Chinese companies have traditionally faced a binary decision when seeking offshore capital: the US markets or the HKEX. The former has often attracted technology and high-growth firms due to its visibility and favorable valuation environment. However, recent geopolitical tensions and regulatory hurdles have prompted a reevaluation of this strategy.
The introduction of the Holding Foreign Companies Accountable Act (HFCAA) in the US in 2025 imposed stricter compliance requirements, effectively halving the number of new listings from Chinese firms on US exchanges between the first and second halves of 2025. Coupled with the Chinese government’s national security laws, which restrict sensitive data sharing, many companies are reconsidering their options.
Hong Kong as a strategic alternative
The shift towards HKEX is not merely a temporary trend; it signifies a substantial recalibration of how Chinese companies access international capital. The growing appeal of the HKEX stems from its structural reforms and alignment with the Chinese government’s priorities, particularly in sectors such as technology and green energy.
Furthermore, the establishment of the Stock Connect program in 2014 has facilitated seamless trading between mainland and Hong Kong markets, enhancing liquidity and attracting more investors. This mutual market access system has positioned the HKEX as a preferred venue for Chinese enterprises seeking global expansion.
A new chapter for IPOs in Hong Kong
The remarkable rise in IPO activity during the first half of 2025 underscores the changing dynamics at play. The surge was fueled by robust demand for listings from Chinese firms, reflecting renewed confidence in the market. For instance, CATL’s dual listing strategy exemplifies how companies can leverage the structural advantages of the HKEX to achieve significant capital raises.
With four of the ten largest IPOs globally during this period, the HKEX reported an impressive 723% year-on-year increase in proceeds. Additionally, the exchange anticipates over 200 active listing applications for the latter half of 2025, indicating strong investor interest and market optimism.
Challenges and considerations for investors
The recent resurgence of initial public offerings (IPOs) in Hong Kong reflects broader shifts in the global investment landscape. This article delves into the multifaceted forces reshaping the trajectory of Chinese listings, including evolving regulations, the complex dynamics of US-China relations, and significant reforms within the HKEX.0
The recent resurgence of initial public offerings (IPOs) in Hong Kong reflects broader shifts in the global investment landscape. This article delves into the multifaceted forces reshaping the trajectory of Chinese listings, including evolving regulations, the complex dynamics of US-China relations, and significant reforms within the HKEX.1
The recent resurgence of initial public offerings (IPOs) in Hong Kong reflects broader shifts in the global investment landscape. This article delves into the multifaceted forces reshaping the trajectory of Chinese listings, including evolving regulations, the complex dynamics of US-China relations, and significant reforms within the HKEX.2
