🚨 Nasdaq Crackdown on Chinese IPOs — New Rules, Big Shift, and a Hidden Chance for Korea?

This blog content is based on the CNBC article published on September 4, 2025.

🇺🇸 Nasdaq Raises the Bar for Chinese Companies

The Nasdaq Stock Exchange has proposed a significant tightening of IPO listing requirements, specifically targeting small Chinese companies.

Under the proposed rule, any company primarily operating in China must now raise at least $25 million in an IPO to be eligible for listing on the exchange.

This is not a minor policy tweak — it’s essentially a gate-closing move for many Chinese microcap firms trying to tap into U.S. capital markets.

Winston Ma, adjunct professor at NYU School of Law, commented:

“This will make it much harder for small Chinese firms to list on Nasdaq.”

💣 Why Now? Retaliation in the US–China Tensions?

Notably, the announcement came right after Beijing imposed punitive tariffs on several U.S. optical fiber companies.
China’s Ministry of Commerce accused American firms of circumventing anti-dumping duties and slapped tariffs of up to 78.2% on products from Corning, OFS, and Draka.

Corning — which derives 32% of its non-U.S. revenue from China — was hit particularly hard.
While Washington didn’t immediately respond, Nasdaq’s proposal is seen as a quiet yet strategic retaliation.

Stephen Olson from the ISEAS-Yusof Ishak Institute explained:

“Business, trade, and investment between the two countries are becoming more difficult and complex. The so-called trade truce is hanging by a thread.”

📊 The Numbers Don’t Lie: Chinese IPOs Dominated in 2024

In 2024, 35 China-based microcap companies listed in New York, compared to just 17 U.S.-based ones.
That’s more than double the number — and most raised only a few million dollars each.

These companies typically have market capitalizations between $50 million and $300 million,
but their small offering sizes have been linked to “pump-and-dump” stock schemes.

Nasdaq explained:

“Listings from Chinese companies with offering sizes below $25 million show significantly higher compliance concerns.”

⚠️ FINRA’s Warning: Stock Manipulation Patterns in Foreign IPOs

In 2022, FINRA (Financial Industry Regulatory Authority) issued a public warning:

IPOs from certain foreign-based issuers — especially Chinese ones — were followed by unusual price surges immediately after trading began.

The concern?
“Ramp-and-dump” strategies: foreign investors opening U.S. brokerage accounts and executing manipulative trades weeks or months after the IPO.

This trend has pushed Nasdaq and regulators to act more aggressively to protect retail investors and uphold market credibility.

🤖 China Responds with Its Own Controls

This isn’t one-sided. China has already been tightening its capital control policies, especially for companies with large domestic user bases.

The country now requires government approval for any overseas listings — especially in tech and platform businesses.

Add to this the latest U.S. restrictions on TSMC’s equipment shipments to its China-based factories,
and the result is a full-spectrum economic and technological conflict.

📌 What This Means for Korean Companies

While China sees a setback, Korea might see an opportunity. Here’s why:

✅ 1. Korean Tech Firms Can Fill the IPO Gap

• With Chinese firms getting pushed out, credible Korean startups and tech companies have a better shot at tapping into Nasdaq.
• Sectors like AI, semiconductors, biotech, and EVs are in high demand.

✅ 2. Trust and Transparency Are the New Listing Criteria

• The market is now rewarding companies with transparent governance and legal accountability.
• Korean firms with robust compliance frameworks will benefit.

✅ 3. Diversifying Capital Access Is No Longer Optional

• U.S. or China — neither is 100% safe.
• Korean companies must develop diversified global capital strategies to hedge geopolitical risks.

📝 Summary

• Nasdaq is proposing a $25 million minimum IPO size for companies based in China
• In 2024, Chinese IPOs on U.S. markets were twice as many as American microcap listings
• The rule change aims to curb manipulation and compliance risks
• China responds with tariffs, signaling deepening economic conflict
• For Korea, this may unlock new IPO opportunities and investor trust

🔗 Source: Nasdaq’s listing plans will make it harder for small Chinese companies to go public in the U.S. (CNBC, Sep 4, 2025)