SHANGHAI/HONG KONG – A record number of Chinese companies are seeking a US listing in 2025 as onerous domestic listing rules and the prospect of better valuations convince them to brave volatile trade relations and US calls for strict oversight of Chinese companies.

In the first half of 2025, 36 mostly small and mid-sized Chinese companies went public in the US, following a record-breaking year of 64 in 2024, law firm K&L Gates said.

Many of those companies went public through special purpose acquisition companies (Spacs) – listed companies set up to buy mainly start-ups, making them public without having to go through the lengthy initial public offering (IPO) process.

Waiting to list on the Nasdaq are more than 40 Chinese companies, including a mobile advertising service provider and a traditional Chinese medicine maker, Chinese disclosure showed.

That number, which excludes confidentially filed listing applications, will take the annual tally of Chinese companies going public in the US to a new high if all materialise in 2025.

“I think it’s a healthy year for Chinese IPOs. It will probably be a record year or near that,” said Mr David Bartz, partner at K&L Gates, who has built a “robust” pipeline of Chinese clients seeking first-time share sales in the US.

Chinese companies have had a harder time going public at home since the government tightened listing rules in 2023, raising the appeal of listing via Spacs in the US, as well as that country’s deeper pool of capital.

Pursuing a US listing amounts to a bet that calls from US lawmakers aimed at diminishing Chinese access to the world’s largest capital market can go only so far, bankers and lawyers said.

One listing hopeful is racing car manufacturer Xinghui Car Technology, whose head raised a toast at a Shanghai hotel in June to celebrate a major step towards going public in the US.

“The US capital market is one of the world’s biggest. It’s liquid and allows easy access to funding,” said Xinghui chairman Song Wenfang upon signing a preliminary agreement to be acquired by Nasdaq-listed Spac UY Scuti.

Since Xinghui’s celebrations, investors have pushed US share prices to record highs, expecting trade deals to be the beginning of the end of uncertainty wrought by months of US President Donald Trump threatening to impose steep tariffs.

More than 100 Chinese companies – including technology leaders Alibaba, JD.com and Baidu – are US-listed, boasting a combined market value of about US$1 trillion (S$1.3 trillion) as at March, showed data from the US-China Economic and Security Review Commission.

In April, bubble tea chain Chagee debuted on the Nasdaq after raising US$411 million in the biggest IPO of a Chinese company in the US in 2025.

Of those seeking to list, a growing number are pre-profit or even pre-revenue start-ups, mainly in the tech sector, aiming for a quicker means of raising capital through a Spac listing, said Ms Karen Mu, managing director at Alliance Global Partners.

That demand has contributed to the total number of companies listing in the US via Spacs almost doubling in 2024 to 57 and climbing to 76 so far in 2025, showed SPACInsider data.

The increased Chinese interest, however, has caught the attention of US lawmakers who called for the delisting of Chinese companies from US exchanges as recently as May citing national security concerns.

In June, the US Securities and Exchange Commission singled out China as it sought to raise disclosure requirements for listing hopefuls.

Domestic hurdles

The rush of Chinese listing hopefuls heading West is being fuelled by high regulatory thresholds for listing at home, as well as criteria skewed to spur growth of sectors in line with national interests.

In China, a company needs to exceed a certain size or be profitable to qualify for a mainboard listing.

Alternatively, to list on tech boards, companies need to align with government self-sufficiency goals or achieve set levels of productivity.

It also takes nine to 12 months on average for an IPO candidate in China to secure regulatory approval, compared with six to nine months in Hong Kong and four to six months in New York, showed an analysis from Merits & Tree Law Offices.

The lengthy approval process and high listing thresholds means that for start-ups, “listing in China becomes mission impossible”, said deal adviser Ronald Shuang of investment company Balloch Holding. REUTERS

ChinaIPOUnited StatesSpac/blank-cheque company