A regulatory tug-of-war: Shein to list in Hong Kong

Corporate Finance - IPO

Published: 6 Sept 2025, by Wilson Lam

On 28 June 2025, online fast-fashion brand and major IPO candidate Shein confidentially filed to list on the Hong Kong Exchange (HKEx), after failing to list in the US and reaching a regulatory deadlock in London.  It appears that Shein represents a larger tectonic shift within global capital markets, which we will unpack in the following report.



Story tracking: observations from various platforms

Shein is a global fast-fashion brand headquartered in Singapore with significant operational ties to China. In June 2024, Shein filed for a London listing after two years of attempting to list in the US.  However, disagreement between London and CSRC arose regarding Shein’s risk disclosure requirement, with London concerned over the involvement of forced labour.  This regulatory deadlock has delayed the IPO review process, currently with no end date in sight.  

Financial Times has extensively documented the story.  Originally optimistic about Shein’s listing relocation to London.  FT still strongly supports Shein’s listing in London, claiming that the choice of Hong Kong was a “back-up plan”, with the intention to pressure London to “save London listing”. 

Reuters has also extensively documented the story, including an exclusive source in June that said Shein’s IPO has been approved by the UK regulators, and is awaiting the regulatory head nod from CSRS.  

In a stark contrast, CGTN has remained relatively silent on the Shein IPO affair, with only one article quoting Reuters’ report on the UK’s earlier approval of Shein’s listing. 



Shein IPO: a regulatory tug-of-war

Given that there has been a breakdown in negotiations between Shein, London, and CSRC regarding the London listing, it is useful to consider the rationales behind each party to determine the source of the deadlock, thus consider Hong Kong’s role in the wider geopolitical environment. 

Since Shein has repeatedly tried to list in US and London, there is a clear preference from Shein to list overseas as part of the company’s broader development strategy.  There are clear advantages for Shein to do so.  First, Shein can raise foreign capital for its global expansion not burdened by China’s strict renmenbi control.  Second, distancing itself from China can help Shein appeal to its western consumer base and, importantly, mitigate geopolitical risks in its global business model. 

For London, this Shein IPO is a lifeline to its lacklustre capital markets that have slowed further in recent years.  Shein’s IPO not only would revamp London’s capital markets by injecting global capital, but also once again prove that London is still a globally relevant and competent capital raising forum.  FT went as far as to suggest that UK should take a chance on Shein regardless the company’s business or governance risks, thus, promoting a position where the UK should still allow the listing for its benefits despite the regulatory irregularities.  Thus, there is a strong inference that the main encumbrance to Shein’s London listing is not due to the London authorities, but China. 

Why is China so reluctant to approve Shein’s London listing?  There are two main reason, 1) a change in economic policy and 2) control of sensitive information.  

Listing in London raises foreign capital outside of China’s capital controls, and China will miss out on the foreign capital if Shein intentionally keeps it out of China.  This constitutes as capital flight and may destabilise the yuan if done at scale.  Conversely, listing in Hong Kong would strengthen renmenbi’s global position by attracting foreign capital to use RMB or HKD for purchasing shares.  Therefore, it is against China’s economic policy for mainland companies to list overseas, and China hoped to contain this trend by implementing the Trial Measures in 2023, requiring CSRC approval before a Mainland company can list overseas.  

Further, a London listing will disclose sensitive information to foreign regulators in the IPO review process.  This happened in 2021 where Didi was forced to delist from the New York mainboard over concerns of disclosing sensitive customer travel data.  Therefore, CSRC hopes to direct the flow of Mainland companies intending to raise foreign capital to Hong Kong, with the underlying logic that if the company wishes to list overseas, why not Hong Kong.

Hong Kong’s revived position in this new fundraising era

Having tracked the story thus far, it is clear that Hong Kong is strongly favoured by CSRC as Mainland companies’ capital raising forum, which considers the forum as China’s offshore fundraising arm that can attract foreign capital without overt disclosures or capital flight.  This regulatory preference from Beijing may in the short run bolster Hong Kong’s IPO environment, as evident over the past few months.  However, this support brings about a nuanced change in Hong Kong’s global perception as not simply a competent fundraising platform on the merits, but a compulsory one.  

For Hong Kong to capitalise on but not to be defined by this strong regulatory support, Hong Kong must make sure it diversifies and position itself as a regional capital raising forum, raising capital not just from China, but also from ASEAN, South Asia, East Asia, and the Middle East.  That way, Hong Kong can maintain its global attractiveness while relying on China’s strong regulatory support, providing a unique position to attract foreign capital into Hong Kong’s capital markets especially in this time of market volatility.



Shein IPO – Confidential filing – Risk disclosure requirement – Supply chain transparency – Renmenbi control – Trial measures – Regional capital raising forum 

Photo: the Standard (2025)