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Chinese regulators are using the Chinese Depository Receipt to entice mainland technology giants, who left for broader access to global institutional investors and bond markets, to list on their home stock market
3. Why did Chinese companies leave in the first place? Among the reasons, access to global institutional investors, the cachet of a Wall Street listing and the ability to tap international bond markets without dealing with China’s capital controls. Also, many Chinese tech firms use a corporate structure, known as variable interest entity, that isn’t allowed on the mainland. Neither are structures such as dual-class shares that give founders outsized control of a company and are also favored by the likes of Alibaba. 4. What would a return home look like?The details aren’t clear, but there would probably be a primary listing in an international market such as Hong Kong or New York, with a secondary share sale using a CDR-type structure in mainland China.
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