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The public listings of Chinese corporations on American stock exchanges have come to a standstill after a two-year period of rapid growth, as regulatory bodies in both nations escalate their scrutiny due to apprehensions about market manipulation.
Merely two Chinese businesses have initiated listings in New York since the outset of January, contrasting with 19 during the identical span last year, according to an FT examination of official documentation. A record-setting 126 Chinese initial public offerings (IPOs) transpired across 2024 and 2025.
This suspension follows several months of augmented oversight by China’s securities regulator concerning offshore listings by domestic entities, with no fresh clearances granted since December. Nasdaq has also tightened its listing criteria, which includes increasing minimum fundraising thresholds and broadening its authority to postpone or reject IPOs it suspects could be susceptible to illicit influencing.
Political pressure in Washington has similarly intensified, with legislators urging the SEC to restrict the entry of Chinese firms into US capital markets, citing investor safeguarding and national security concerns.
The decline in Chinese IPOs in New York serves as the latest indication of a financial uncoupling between the world’s two largest economies, representing a significant reversal from an era when numerous well-known Chinese enterprises opted for US exchanges to debut their shares.
“This forms part of a broader tendency towards diminished interaction between the Chinese financial framework and the American financial framework,” stated Andrew Collier, a senior fellow at the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School.
That impetus noticeably diminished in the latter half of the previous year when the China Securities Regulatory Commission intensified its appraisal of overseas listing requests from domestic firms, posing intricate questions ranging from whether employee stock option schemes might constitute insider trading to the reasons some groups had failed to make complete social insurance contributions.
A legal professional based in Shanghai, who has engaged with the stock regulator, commented: “Many companies are now either rejected during the CSRC’s review process or left awaiting a response for extended durations, prompting some to retract their applications.”
He further noted that the evaluation timeframe had expanded from approximately two months to an “unspecified” period.
Concurrently, Nasdaq unveiled measures last September that made it more challenging for Chinese companies to list, including a regulation demanding at least $25 million in IPO proceeds — a sum considerably higher than what most Chinese issuers on the exchange have garnered in recent years.
“It sends a clear message that smaller Chinese enterprises are not welcome on Nasdaq,” remarked Daniel McClory, head of China at California-based Boustead Securities, which has assisted with Chinese IPOs on the exchange.
Regulators in both countries were, in part, responding to apprehensions regarding manipulation in small-cap Chinese stocks traded in New York, which has resulted in losses for US retail investors.
“Pump-and-dump schemes involving Chinese equities are quite prevalent,” said Jamie Selway, director of the SEC’s trading and markets division, adding that the agency had received reports from major retail brokers since last summer indicating that the problem was causing substantial investor detriment.
Worries about stock market manipulation constitute one element driving the CSRC’s stricter scrutiny of US listings, as the issue has become a fresh source of criticism from Washington.
“Many modest Chinese firms were unable to list domestically and consequently turned to lower-threshold venues such as Nasdaq, which was not initially a primary concern for Beijing,” explained an executive at a prominent Chinese investment bank that collaborates on companies’ US IPOs. “However, when American politicians began accusing Chinese entities of entering US markets to defraud American investors, the CSRC had to strengthen oversight at the origin to avoid providing critics with further leverage.”
The CSRC stated that the manipulation of Chinese stocks in New York falls within the purview of US regulators and ought to be “addressed rigorously in accordance with the law,” adding that it was aiding the SEC in investigations into alleged pump-and-dump operations.
The more rigorous regulatory climate has led numerous Chinese firms to postpone their plans to go public in the US, despite New York remaining their most viable IPO destination because many were unable to list in Shanghai and would have achieved lower valuations in Hong Kong.
Chinese groups seeking US listings must secure clearance from the local stock regulator in addition to receiving approval from the US SEC. The CSRC has not accepted any new filing submissions for US IPOs since October.
“We have no alternative but to postpone and observe the situation, even though this could lead us to miss our listing opportunity,” commented an executive at a Shanghai-based company that had initially intended to float shares on Nasdaq in the first half of this year.
Despite the enforcement, US regulators have indicated that the door remains open to Chinese issuers who fulfill listing requirements.
Selway of the SEC remarked: “You wouldn’t want to discard the good along with the bad by asserting that all Chinese companies are inherently poor investment choices. That would be profoundly incorrect. Chinese companies are still welcome in the US equity market, just not the harmful small-cap manipulative ones.”