Hello, I’m Evelyn. I am writing to you from Beijing. Welcome to the latest edition of The China Connection. This is a concise summary of what I have seen and heard from local companies.
Recent conversations with investors revealed notable changes. China is looking at how finance supported the rise of Silicon Valley and is following suit. Growing pains and risks aside, this could mean serious competition for the U.S.
big story
The money behind China’s latest technology boom leads to Hong Kong, the most globally accessible of China’s stock exchanges, which has seen a resurgence in the last year.
Companies have raised more funds by listing on the Hong Kong market than on any other exchange. More than 400 companies are currently listed, but I’ve heard that the estimated value is even higher thanks to the exchange’s relatively new confidential listing rules.
“This[surge in Hong Kong listings]will continue for more than a year or two,” Gary Locke, a Hong Kong-based partner at IPO advisory firm King & Wood, told me on the sidelines of a venture capital forum in Hangzhou last month.
Current capital market activity is “far greater” than anything seen over the past 35 years, Locke said. Since the Iran war began two months ago, foreign funds have flowed into Hong Kong banks, preparing them for investment in China, he said.
More than 40 companies have listed in Hong Kong so far this year as regulations ease and U.S. scrutiny of Chinese investments in sensitive areas such as defense technology increases.
Importantly, Hong Kong’s resurgence in capital activity is helping to challenge the perception that Hong Kong does not offer the same volume or stock valuations as the United States, said Jing Yan, chief partner at KPMG’s Hangzhou office in China.
And despite reports that the Chinese government is making it harder for Chinese companies established overseas to list in Hong Kong, none of the five investors and advisors I spoke to for this article worried that this would halt the flow of IPOs.
Goldman Sachs analyst Shi Hu said in a report last month that only about 15% of Hong Kong’s pipelines are likely to be subject to regulatory oversight from China. He predicts Hong Kong listings will raise about $60 billion this year, almost double the $36 billion in 2025.
King and Woods-Lock said these regulations also undermine international investors’ competitive advantage in winning startup deals in China, as they incentivize founders to pursue domestic funding.
“Who needs SoftBank when local companies can make decisions faster and offer better valuations,” Locke said.
Puhua Capital, China’s leading venture capital firm, does not expect any major changes in overseas investments this year, founding managing partner Shen Qinhua told me.
But he expects Hong Kong’s IPO momentum to continue. Shen said about 60% of Pfa’s total investments are in “hard technologies” such as AI, chips and commercial aerospace.
On April 17, 2026, on the day Manycore Tech, one of Hangzhou’s “Six Little Dragons,” skyrocketed on its trading debut, Hong Kong Exchanges and Clearing Board Chief Executive Officer Bonnie Chan poses with representatives of newly listed companies.
China News Service | China News Service | Getty Images
A new ecosystem is born
Another IPO by China in Hong Kong is just another step in China’s development of its own thriving technology ecosystem. Listing is an important avenue with potentially big returns for early-stage investors and encourages more capital to support Chinese startups aiming to become global players.
As younger generations take control, there are increasing signs that China is catching up with Silicon Valley and Wall Street in other ways as well.
Previously, Chinese entrepreneurs preferred to maintain control of their companies for as long as possible, making majority-owned IPOs the most popular option.
But now, founders of several startups are becoming more active in divestitures and M&A, said Zhou Kaibing, chairman of the Hangzhou Venture Capital Association. This gives investors more options to make money and increases the size of the industry.
Things are also changing when it comes to technology itself.
Chinese companies have long emphasized that they are focused on building industry-specific AI with immediate business benefits, while their American peers have aimed to build superhuman general artificial intelligence.
But Qi Ruan, partner and vice president at S&R Venture Capital, said Chinese investors are increasingly looking for entrepreneurs with a clear vision of the future and how their technology fits into it.
Globally competitive technology and a growing financial support system are helping to strengthen China’s attractiveness to foreign investors.
According to Zhou, the Hangzhou VC Forum attracted guests from as far away as India, Spain and Belgium.
The delegation from India in particular included more than 20 business leaders from Dharma Capital to industrial giant Tata, said NIIT vice-chairman and managing director Vijay K. Thadani. I also participated in a one-week trip to China.
Tadani said the two companies are exploring investment opportunities and partnerships with Chinese robotics companies in the manufacturing space.
And amid cross-border regulatory uncertainty, Luan hopes his VC firm can expand by highlighting that it is the only fund in Hangzhou licensed to accept foreign capital while directly investing in Chinese yuan.
All of this reflects the fact that global money and innovation are no longer America’s sole assets.
Still, even if China has the ingredients in place to build a homegrown venture capital ecosystem, it won’t be a replica of the U.S. model.
Locke said the main risk was regulatory surprise. “A lot of what we do in this part of the world is policy-based.”
need to know
BYD faces increased EU scrutiny over labor abuse allegations at Hungarian factory
Electric vehicle giant BYD has become the first Chinese company to be brought before the European Parliament over allegations of labor abuses in Hungary, CNBC reports, following a supervisory investigation into working conditions there.
CATL plunges more than 8% as Chinese battery maker announces $5 billion stock issue
Battery giant Contemporary Amperex Technology has announced plans to raise approximately $5 billion to support expansion into overseas markets, expand production capacity and strengthen its zero-carbon strategy.
‘Hard development’ under Meta-Manus Agreement draws a line in China’s AI competition with the US
China’s decision to block U.S. tech giant Meta’s $2 billion acquisition of artificial intelligence startup Manas is seen by analysts as a warning to tech entrepreneurs.
very soon
May 6: Stock exchanges in Shanghai and Shenzhen reopen after Labor Day holiday
May 6: April RatingDog China Services Purchasing Managers Index (PMI)
May 9: China trade statistics for April
May 11: China Consumer Price Index and Producer Price Index for April
