Foreign Retail Investors Locked Out of China’s Record-Breaking Mainland IPOs

China's mainland IPO market is delivering staggering first-day pops, with chipmaker MetaX Integrated Circuits surging nearly 700% in its Shanghai debut last week. Moore Threads eclipsed even that performance earlier this month, rocketing over 400% at opening. Yet global retail investors face insurmountable barriers to participation in these lucrative offerings.

The structural hurdles begin at the most basic level. Opening a brokerage account with a Chinese securities firm requires first establishing a Chinese bank account—a process demanding proof of residency or valid Chinese visa. Foreigners must additionally hold existing positions in mainland-listed stocks before qualifying for IPO lotteries. "It's not even possible," says Chris Zhang of China Fortune Securities, noting most foreign banks lack the necessary brokerage partnerships to facilitate account creation.

Shanghai's regulatory framework permits only select foreign entities direct access to A-share trading. This exclusionary system persists even as Chinese tech listings demonstrate unprecedented volatility and upside potential, creating a bifurcated market where domestic investors reap disproportionate rewards from the country's financial liberalization.