Shanghai's year-old STAR market is now second only to Nasdaq in value of IPOs and secondary listings, attracting 17.3% of total issuance, surpassing Hong Kong
Context & Ripple Effects
One year after the $44B frenzied debut that added 25 companies to the board in a single day, Shanghai's STAR Market has converted launch hype into sustained issuance share: 17.3% of global IPO and secondary-listing value, enough to push past Hong Kong and rank behind only Nasdaq.
The arc since has been volatile — a record 76 companies suspended their STAR applications amid regulatory scrutiny in March 2021, and startups later floated below private-round valuations during the board's 2022 slump — yet the pipeline keeps refilling, with CXMT clearing review in 2026 for what could be China's top listing of the year.
First-order effects
- Hong Kong immediately cedes its role as the default venue for Chinese tech flotations, losing deal flow and associated banking fees to Shanghai for issuers who can list domestically.
- Chinese tech companies gain an at-home alternative to the Nasdaq route, letting them raise in yuan without navigating US listing scrutiny.
Second-order effects
- Hong Kong's exchange responds by reforming rules — including allowing lossmaking companies to float — to defend its IPO franchise, which later feeds a revival capped by 25 debuts in December 2025, the busiest month since November 2019.
- Investment banks and auditors re-weight their China coverage toward Shanghai's review process, whose regulatory scrutiny can freeze pipelines wholesale, as the 2021 suspension wave showed.
Third-order effects
- If the pattern holds, Chinese tech capital formation structurally migrates onshore, leaving Hong Kong to compete as a secondary international venue while Beijing's policy cycle — fueling rallies like the Star 50's 2026 run at a 150+ P/E — becomes the dominant variable in Chinese tech valuations.
The trend: China's tech IPO activity is shifting onshore from Hong Kong to Shanghai, with Beijing's policy stance rather than market openness determining when the STAR tap flows.