Return of Chinese unicorns to boost new economy

THE return of overseas-listed Chinese unicorn companies to the A-share market will facilitate the rise of the new economy, an expert said.

ICBC International economist Cheng Shi said in an article that such tech firms, valued at over US$1 billion, will attract more private capital into innovative startups and break the domination of the traditional sector in the country’s capital market.

The China Securities Regulatory Commission on Friday announced a pilot program to help leading tech firms having gone public abroad re-issue shares in the mainland market via depositary receipts. Tech giants, such as US-listed Alibaba and Baidu, will be able to reach domestic investors.

Businesses in high-tech and emerging sectors including big data, cloud computing, artificial intelligence, chipmaking, and biomedicine will be the first group to come back to the mainland market, Cheng said.

For years, the capital market was dominated by property developers, banks and other traditional companies, with innovative firms blocked by legal and technical barriers, such as profitability requirements. Many tech firms turned to markets in Hong Kong and New York.

As regulators started to loosen rules for the new economy, overseas-listed firms have become optimistic about a return.

Qihoo 360, China’s largest Internet security company, returned from the New York Stock Exchange in February and saw its market value peak at above 440 billion yuan (US$70 billion), nearly seven times the value when it delisted from the US market.