08. Shein’s Secret London Listing: Why Is It Getting Harder for Chinese Companies to List Overseas?
Summary
Chinese companies listing overseas have not faced a steadily tightening regime; the pendulum has swung between onshore fundraising capacity, dollar-investor exits, and regulatory cycles. 茉茉 sees the period before 2010 as the peak for state-owned enterprises and early private companies going offshore; after the Growth Enterprise Market opened in 2009, companies clearly returned to A-shares. U.S. listings heated up again in 2017, peaked from the second half of 2020 through the first half of 2021, and then came to an abrupt halt after the Didi episode.
Many companies are going public today not to expand proactively, but because private-market valuations and shareholder exit pressure are forcing the issue. Investors who entered at the 2020-2021 peak are now facing a valuation inversion between the private and public markets, leaving companies to “go public with their heads down” because they have little choice. When 卫诗婕 asked whether an IPO now meant “bleeding,” 茉茉’s industry read was “60%”; in the end, the company or its investors usually have to give up some value.
Shein’s failure to break into the U.S. market is not the result of a single “China” label, but of its low-price model, the appearance of dumping, geopolitical identity, and regulatory concerns piling on top of one another. 茉茉’s view: “One problem by itself is not a problem, but several problems together become a problem.” Temu is just as cheap but already sits inside a listed-company structure; as a prospective IPO candidate, Shein is more exposed to an unfriendly SEC at the gate.
China’s new cybersecurity reviews and CSRC filing requirements have lengthened the process, but do not necessarily amount to the blockade the market imagines. 茉茉 says that as long as a company is not in a particularly sensitive industry and responds fully to requests and questions, the vast majority eventually clear. Moving the headquarters to Singapore does not automatically remove a company from the regulatory perimeter. 卫诗婕 summarized the situation as “you can’t escape,” and 茉茉 agreed: once regulators name a company, it still has to cooperate.
Shein’s pivot to London may be an effort to put deliberate distance between itself and the China label after hitting resistance in the U.S. 茉茉 considers Hong Kong the more mainstream venue for Chinese companies, but London can still support European expansion and brand-building, while fitting Shein’s broader effort to move closer to Europe and the U.S.
What could truly shake Shein’s valuation is not just the listing venue, but the chain reaction among cross-border taxes, supply-chain relocation, and demand for low prices. If moving production to Southeast Asia pushes up costs, the company will have to choose among higher prices, lower volumes, thinner margins, and a lower valuation. The fall from more than $100B to over $60B has a broad market component, but the primary-secondary market inversion still has to be resolved through buybacks at the old price, lower-priced issuance, or additional subscriptions by existing shareholders.
For global companies, identity design is shifting from a post hoc exercise in shedding labels to a capital-markets architecture choice that should be made while the company is still small. 唐伟 describes Shein simultaneously as a Chinese, Singaporean, and U.S. company, reflecting the separation of its supply chain, headquarters, and market. 茉茉 advises founders worried about a U.S. valuation discount to diversify their headquarters, functions, and shareholder base early, while stressing that “we cannot use today’s perspective to judge how everything will develop in the future.”
Deep dive
1. Chinese Companies Have Gone Through Three Offshore-Listing Phases
茉茉 sees the period before 2010 as the first peak. Early central SOEs mainly went to Hong Kong: China Mobile listed in Hong Kong and the U.S. simultaneously in 1997; PetroChina, Sinopec, and CNOOC followed around 2000, followed in turn by the major banks, including ICBC, ABC, Bank of China, and China Construction Bank. Funding mattered, but the deeper objective was to improve governance through a listing and align with international rules.
Private companies began exploring dollar financing and VIE structures through cases such as Sina. 茉茉 recalls that Sina listed in the U.S. around 2004, with New Oriental and others entering overseas capital markets around the same time. A-shares had limited capacity then, so “any company that was relatively good” generally prioritized offshore markets.
After the Growth Enterprise Market opened in 2009, higher valuations and relatively loose conditions pulled in a large number of private companies; some even unwound their dollar structures and returned to A-shares. The U.S. figures she cited are telling: 4 listings in 2011, 3 in 2012, and 6 in 2013. Even in 2014, the total was only 12, including Alibaba.
The next U.S.-listing wave began in 2017, with Sogou, RYB Education, Pinduoduo, Luckin Coffee, and Tencent Music listing one after another. It peaked from the second half of 2020 through the first half of 2021. The window shut after the Didi episode and did not reopen until Atour listed at the end of 2022, and even then volumes remained far below the previous cycle.
2. The Purpose of Listing Has Shifted from Governance to Forced Exit Resolution
Early SOEs sought to use offshore listings to complete reform and establish modern corporate governance. Internet companies with dollar structures cared more about giving investors an exit, while also gaining fundraising capacity, an acquisition currency, and leverage for further expansion.
Investors who entered during the high-valuation period of 2020-2021 now broadly face a valuation inversion between the private and public markets. 茉茉 says many companies, acting in their own interests, “did not really want to go public that badly,” but were forced to “go public with their heads down” to meet shareholder exit demands. For many, an IPO is now less a growth milestone than a way to deal with the exit pressure created by earlier financing rounds.
卫诗婕 described the situation as going public with “bloodshed.” 茉茉’s industry read was “60%,” though she qualified the point: not every company is in this position, and the market still has genuinely high-quality companies seeking to list on their own initiative. But “many companies going public now are carrying enormous pressure from their investors.”
The decline in IPOs has also reshaped investment-bank compensation. Foreign banks cover M&A, bonds, convertibles, and cross-border Europe-U.S. businesses, and typically use layoffs to preserve the workload and compensation of those who remain. Chinese banks have laid off fewer people and more often absorbed the dearth of deals through broad-based pay cuts; workloads have also fallen from prior levels.
3. Shein’s Three-Year IPO Run Has Been Rewritten by Two Regulatory Regimes
茉茉 believes Shein had been preparing for a U.S. listing since at least 2021, when every investment bank wanted the mandate. It did not complete the process before the Didi episode. Afterward, Chinese companies seeking U.S. listings first faced cybersecurity reviews, followed by the overseas-listing filing regime introduced in February 2023.
Before Atour listed at the end of 2022, 茉茉 understands that it answered a large number of cybersecurity questions and ultimately cleared the process. Hesai Technology and QuantaSing later listed at a time when the CSRC filing hurdle did not yet exist. Those cases restored some confidence, but for companies that had already completed their cybersecurity preparations, the new filing requirement still added a new procedural gate without warning.
Shein’s users and revenue are concentrated in the U.S., so in theory it may not involve Chinese user data. But its supply chain, cost base, management, and key personnel have long been concentrated in China, potentially bringing it within the CSRC’s filing perimeter. Even moving the headquarters and some senior executives to Singapore cannot erase the company’s actual operating links in regulators’ eyes.
4. The Practical Friction from Chinese Reviews Is Smaller Than Companies Imagine
茉茉 acknowledges that cybersecurity and CSRC reviews add time, paperwork, and psychological pressure. But based on her project experience, outside particularly sensitive industries, the vast majority of clients have “not had major problems” as long as they submit the required materials and answer the questions. After accumulating experience, regulators have also become better at identifying which data is genuinely sensitive.
She believes many companies moved their headquarters to Singapore mainly to shed the “China label” and avoid the CSRC process. But after more than a year of practice, the number of companies that have actually been blocked is “very small.” Her direct conclusion: “A lot of this fear is something people have manufactured for themselves.”
卫诗婕 cited lawyers and asked whether a company could avoid regulation through its own subjective definition of its status. 茉茉 confirmed that if Chinese regulators name the company and require it to enter the process, it must submit the materials. Some well-known companies initially did not want to enter the process but cooperated after being named. An offshore identity cannot be settled by unilateral declaration.
5. U.S. Resistance to Shein Combines Business-Model and Country Risk
茉茉 rejects the idea that Chinese companies can no longer list in the U.S. across the board, since Chinese ADRs are still getting through. She sees Shein’s more distinctive obstacle as its extremely low prices. To Americans and U.S. regulators, it may look like “a very low-end dumping platform,” with cheap goods undermining market rules.
She contrasted Shein with other outbound clients: some European and U.S. businesses can achieve 70% gross margins and 40% net margins, levels that are difficult to imagine in China. Shein’s ability to move product rapidly at unusually low prices makes it more vulnerable to a dumping narrative. Geopolitics is part of the picture, but not the only explanation in her view.
卫诗婕 asked why Temu, which is equally cheap, had not faced the same listing obstacle. 茉茉’s answer was that “it is already listed,” so regulators no longer have the same leverage to constrain it at the IPO gate. Shein combines low prices, a dumping narrative, and Chinese associations; “small problems added together become a big problem.”
6. London Is Both an Identity Choice and an Alternative Exit after U.S. Resistance
茉茉 has asked others: if the U.S. is unwelcoming, why not return to Hong Kong? In her view, Hong Kong remains more mainstream than London for Chinese companies. But she understands that Shein was extremely reluctant to remain associated with the China label, and may have viewed Hong Kong as “too close to China,” leading it to choose London instead.
She does not see any special cost to going to London. A company can choose among Hong Kong, Singapore, London, Frankfurt, and the U.S. based on the market that suits it. London also offers value for European expansion and brand-building, and fits Shein’s effort to position itself closer to Europe and the U.S. overall.
茉茉 says the regulatory process itself is not public, but if a company has in fact gone through it, the relevant information will be disclosed on the CSRC website. If regulators summon the company or name it and require cooperation, it must comply even if its headquarters are overseas.
7. Taxes, Supply Chains, and Valuation Are Shein’s Real-World Challenges
Cross-border e-commerce naturally faces complex compliance and tax issues. 卫诗婕 asked whether that included Chinese taxes, tariffs, overseas taxes, and turnover taxes. 茉茉 replied that it involved “not just China”; other countries have extensive tax issues as well, and cross-border taxation is particularly difficult to untangle. She has studied many cross-border e-commerce companies and believes taxes are what ultimately prevent many of them from listing.
If Shein moves its supply chain to Southeast Asia to dilute its Chinese identity, costs may rise with it. That creates an unavoidable chain of questions: Does the company have to raise prices? Can volumes hold after the increase? Will the profit pool shrink? And can the original valuation still stand?
茉茉 attributes Shein’s decline from more than $100B to over $60B first to the broad selloff across global assets, rather than to a Shein-specific failure. Alibaba and Tencent have also suffered valuation compression. But market-wide weakness does not eliminate the primary-secondary market inversion; the company still has to deal with shareholders who invested at higher prices.
Possible solutions include the company buying back part of the shares at the previous-round valuation, or issuing at a lower price and allowing existing shareholders to subscribe again, bringing the valuation back into balance. Whatever the structure, “the company or the investors have to give up value.” As she put it: “The historical peak is there … everyone still has to pay for some of the things they did back then.”
8. “Chinese, Singaporean, and American” Is the Real Structure of a Global Company
In the account given by Shein Executive Chairman 唐伟, its origins and supply chain make it a Chinese company; its headquarters, CEO office, finance function, and other operations are in Singapore, making it a Singaporean company; and its main market, values, and vision are oriented toward the U.S., allowing it to be described as an American company as well.
茉茉 calls the framing “quite wise.” It does not deny Shein’s Chinese origins, but narrows the Chinese component to the supply chain while emphasizing the Singapore headquarters and U.S. market. Even if investment bankers did not design it directly, the structure serves the practical need to avoid geopolitical friction and reduce the valuation discount associated with the China label.
卫诗婕 went further: truly global companies no longer place their businesses, teams, and supply chains in the same location. In the past, Chinese companies simply added overseas growth; today, the blurring of identity is a direct product of organizational globalization. Pressure against globalization is forcing founders to embrace it through more decisive choices on corporate structure and team configuration.
9. Luckin and Didi Explain Why China Added Offshore Oversight
茉茉 traces the institutional starting point to Luckin Coffee. The company listed in the U.S. in 2019 and its fraud surfaced in 2020. The CSRC found that it had “no administrative means whatsoever” to deal with the case directly: the listed entity was in the Cayman Islands and the financing came from the U.S., even though the main business was in China.
卫诗婕 asked why China had to intervene. 茉茉 said the core issue was the reputation of Chinese companies as a whole: one company’s fraud reinforces the impression that “Chinese companies are all dishonest,” hurting other Chinese ADRs seeking to list. The regulatory objective was to screen out obviously problematic companies before they raised money overseas and damaged the broader market’s reputation.
The Didi episode pushed that institutional need to its peak. Cybersecurity reviews came first, while the CSRC’s overseas-listing rules had already been circulating among ministries. 卫诗婕 recalled a consultation draft arriving on the eve of Christmas in 2021; 茉茉 said the document had been under preparation and moving through procedures for some time before being issued after the 2023 Lunar New Year. The rationale is understandable, but adding another review objectively lengthens the process.
10. Geopolitical Risk Requires Early Design, but Not Permanent Pessimism
茉茉 believes identity became more sensitive as U.S.-China relations changed. She cited her own experience of being denied a visa in 2019 despite having studied in the U.S. as evidence that the deterioration in bilateral ties was deeper than many imagined. 卫诗婕 said many entrepreneurs had already sensed the turn toward deglobalization in 2019. At the same time, Chinese IPOs remained hot, creating a delicate coexistence of capital-market exuberance and political realignment.
The 2021 education crackdown reinforced the market’s view that Chinese companies were subject to unpredictable policy risk. Listed companies such as New Oriental and TAL Education were hit hard, while unlisted companies including Zuoyebang and Yuanfudao might struggle to list. The Didi episode, the dispute over audit working papers, and the PCAOB standoff then compounded one another, becoming a process of decoupling in which “you punch me, I punch you.”
For founders targeting U.S. capital markets who are genuinely worried about a Chinese-company discount, 茉茉 recommends establishing overseas headquarters, finance, and other functions while the company is still small, and building a shareholder base that includes capital from Southeast Asia, Europe, and the U.S. Once a company is already “well known,” repackaging it as a company from another country will not change what everyone knows it originally was.
This is not the only route. Transsion serves African markets as a Chinese company and listed on the STAR Market, potentially earning a higher valuation than it would overseas. 茉茉 sees early planning and identity design as insurance against a “black swan” that could appear at an unknown point in the future, while warning that the current environment may look different in 2 or 3 years. The shared conclusion: experience is maturing, but there is no need to be excessively pessimistic about the capital markets.