In Depth: Chinese Firms Face Shifting Global IPO Landscape

Chinese companies seeking overseas stock market listings face new challenges and shifting dynamics in 2025 due to changing market regulations and geopolitical tensions. The United States, particularly the Nasdaq Stock Market, has historically been the main venue for Chinese initial public offerings (IPOs), providing access to high global valuations and investor diversity. However, newly proposed Nasdaq rules may restrict Chinese IPOs by introducing stricter fundraising and public float requirements, and by expediting suspension and delisting processes for companies that do not meet ongoing standards. These changes are casting doubt on future listing prospects for Chinese firms abroad[para. 1][para. 2][para. 3].

Nasdaq’s proposed changes would significantly raise the minimum IPO proceeds requirement, targeting companies primarily operating in China. For example, among the 60 Chinese IPOs on Nasdaq last year, only eight raised more than $25 million, and only four out of 57 so far in 2025 did so. The minimum public float requirement may also be tripled from $5 million to $15 million for profit-qualifying companies. Additionally, Nasdaq seeks to eliminate the 180-day grace period for underperforming companies to regain compliance, reasoning that distressed firms are unlikely to recover and could expose investors to poor returns. As of September, 41 Chinese companies listed on Nasdaq had a market value below $5 million, and another 45 fell between $5 and $10 million, meaning over a quarter of listings might be affected by these regulatory shifts[para. 4][para. 5][para. 6][para. 7][para. 8].

Industry insiders predict these rules will sharply reduce the number of Chinese IPOs on Nasdaq, potentially leading to a 40%-50% drop in the second half of 2025. Small- and mid-cap Chinese companies, once able to use small IPOs as quick entry points into American markets, would lose that pathway, signaling a significant change in cross-border finance options. While some analysts view the moves as part of the US-China strategic rivalry—since capital markets are increasingly entangled with geopolitical maneuvering—others argue the changes are meant to enhance market quality by weeding out weaker firms. High-quality, larger Chinese companies are unlikely to be affected and might benefit from increased scarcity and valuation premiums[para. 9][para. 10][para. 11][para. 12][para. 13].

Meanwhile, alternatives like London and Hong Kong are being considered. The UK recently reformed its listing rules to attract more global IPOs, including those from China, by removing revenue track records and accommodating dual-class share structures and variable interest entities (VIEs)—corporate structures often used by Chinese firms. However, London’s market is less appealing for growth-oriented Chinese tech companies due to lower valuations (typically 20%-30% lower than in New York), a smaller retail investor base, and continued high governance standards. Even with eased requirements, most companies unable to meet Nasdaq’s new thresholds would still find London’s gatekeeping difficult to bypass[para. 14][para. 15][para. 16][para. 17][para. 18][para. 19][para. 20][para. 21][para. 22][para. 23][para. 24].

Contrastingly, Hong Kong is experiencing a surge in IPO activity, with funds raised in the first eight months of 2025 rising nearly sevenfold to HK$135 billion ($17.3 billion). Expectations are high that Hong Kong will become the main listing venue for Chinese firms unable to access US markets. While some worry that welcoming U.S.-delisted companies could dilute market quality, proponents believe Hong Kong has the regulatory sophistication to balance attraction with quality control, solidifying its role as a top international IPO hub[para. 25][para. 26][para. 27][para. 28][para. 29][para. 30].