Xi Jinping’s initial-public-offering boom

In a parallel universe CloudWalk might have raised hundreds of millions of dollars in Hong Kong or New York. The firm is one of the world’s leading facial-recognition outfits: its technology can recognise people in milliseconds with astonishing accuracy. But modern geopolitics pushed it in another direction. America has sanctioned the firm for alleged human-rights violations, owing to reputed links with China’s military. So instead of listing on the nasdaq in New York, CloudWalk chose Shanghai’s star Market, a bourse set up in 2019 to attract China’s rising tech companies. The company’s share price is up by a fifth since its debut in May.

CloudWalk’s listing is one of hundreds that have put Shanghai’s star and Shenzhen’s ChiNext, another tech-focused market, at the heart of global initial public offerings (ipos) this year. Firms have raised $63bn on Chinese exchanges, compared with just $21bn in New York and $6bn in Hong Kong. The vast majority of proceeds has been…

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This article was written by and originally published on www.economist.com