Opinion | Hong Kong must spread its wings and look beyond mainland Chinese IPOs

Hong Kong might be back on top of the global intial public offering (IPO) tables, but too many of its listings are Chinese. If the city wants to re-establish itself as Asia’s financial hub, it needs to be more than a conduit for mainland capital.

Recent listings have been led by mainland Chinese companies seeking to raise capital in a currency pegged to the US dollar, beyond the reach of domestic capital controls – a key advantage as they look to fund overseas expansion amid weak demand at home.

That includes battery maker CATL, which raised US$5.2 billion in Hong Kong in May. Singapore-based online retailer Shein has also reportedly filed for a Hong Kong IPO after its efforts to list in London failed to gain traction.

About 47 of the companies in Hong Kong’s record IPO pipeline are already listed on mainland exchanges such as Shanghai or Shenzhen. With US-China tensions high amid US President Donald Trump’s tariff war, Hong Kong has become the default offshore venue for Chinese companies seeking global capital.

This surge in activity signals that confidence is returning to Hong Kong’s capital markets, but the fact that Chinese firms have dominated recent listings leaves the city’s IPO market exposed. The risk is that if the mainland tightened capital controls or put restrictions on overseas listings, like it did in 2021, then Hong Kong’s IPO pipeline could dry up just as quickly as it reappeared.