There were 43 Chinese companies who went public in the US during 2018, up from 24 Chinese companies in 2017 and 10 Chinese companies in 2016, according to Wind, a Chinese data provider.
China's IPO application numbers have been increasing sharply in recent years with the development of China's economy. However, relatively rigid requirements and long verification times have kept dozens of companies out of the door. Therefore, many small and medium-sized companies, especially those who were not profitable chose to float in overseas stock markets.
US and Hong Kong stock markets are the most popular stock markets apart from China's A shares market for Chinese companies who are seeking IPOs.
Chinese analysts said the reasons were the differences in stock market infrastructures.
In detail, America's IPO approval process is fast and straightforward if an applying company has fully disclosed its information. This allows companies to issue stocks no matter whether they are profitable or not, what risks they are bearing or how long they run their business.
Many startups who are seeking IPOs in China, on the other hand, need to meet certain profitability and other requirements, while, waiting for approvals from authorities.
Chinese authorities have been making changes since last year. For instance, the Foxconn Technology Group's IPO only took 36 days from the day it handed in its application to the day it was successfully approved.
Also, China launched Chinese Depositary Receipts (CDRs) to woo overseas companies to list back in Chinese stock markets. And the government is currently pushing forward with the new science and technology innovation board construction to provide a fundraising platform for technological companies.
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