Beijing wants more of its tech companies to list domestically


China is offering them new incentives, including lowering the market-cap threshold for internationally incorporated Chinese firms from 200 billion yuan to 100 billion. The planned rules would apply to the Shanghai Stock Exchange’s Science and Technology Innovation Board, or STAR Market. (Wall Street Journal)

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Talking point: Technical issues have made it more complicated for Chinese startups to list domestically rather than in the U.S. or Hong Kong—they’ve raised US$2.9 billion across 19 initial public offerings (IPOs) in the former, and US$13.9 billion across 70 initial public offerings in the latter. It can take up to 15 months for a listing application to make it through STAR, and post-public lockup periods are longer. Many Chinese companies are also incorporated internationally, as activities like raising venture capital are restricted under the country’s laws. The new rules are meant to cover both those firms and startups. The shift is part of China’s efforts to become more self-reliant amid a trade war with the U.S.