China’s initial public offering ( IPO ) market appears headed for a rebound as the number of domestic companies going public grew by a significant 32.9% in the first half of 2025 from a year ago, contributing to a nascent recovery in the country’s venture capital and private equity ( VC/PE ) sectors.

A total of 109 Chinese companies listed on both onshore and offshore exchanges in the first six months of 2025, from 82 in the same period in the previous year. Total proceeds reached approximately 121.36 billion yuan ( US$16.7 billion ), up 158.7% year-on-year and 24.7% from the previous half-year period, according to data from Zero2IPO Research. Machinery manufacturing was among the sectors with the strongest performance.

Since the China Securities Regulatory Commission ( CSRC ) announced the measures to "temporary tighten the pace of IPOs" on August 27, 2023, the A-share market has undergone two years of profound transformation. The measures have alleviated short-term liquidity pressure, curbed the trend of IPOs listing below issue price, and supported the secondary market to recover. The regulator has shifted its focus from quantity to quality, elevating the standards for companies seeking to go public.

With the stabilization of the secondary market, there are multiple signs that market recovery is underway. The pace of approvals of listing applications has accelerated since the start of the year. Meanwhile, the STAR Market is expected to further improve its listing standards, encouraging more high-quality technology companies to go public. The trend of Chinese companies pursuing listings in Hong Kong is also gaining momentum.

A breakdown of the new listings shows that 51 companies debuted on mainland China’s A-share markets, representing a 15.9% y-o-y increase. On the other hand, 58 Chinese companies listed on overseas exchanges, marking a significant 52.6% increase from a year earlier and a slight 1.8% rise from the previous six months.

This resurgence in IPO is echoing a recovery in China’s VC/PE sector. The number of VC/PE-backed Chinese IPOs and their average exit returns both showed continued improvement, according to Zero2IPO Research. During the first half of this year, the total number of VC/PE firms behind these IPOs and the aggregate book value of their shareholdings also increased compared to the same period in 2024.

Gaining momentum

A total of 73 VC/PE-backed Chinese companies went public in the first half of the year, a remarkable 35.2% y-o-y increase. These companies raised a combined 56.55 billion yuan, surging 51.7% from a year earlier and 67.2% from the second half of 2024. The total book value of shares held by VC/PE firms in these newly listed companies, calculated at their IPO issue price, was 105.88 billion yuan, a 65.6% y-o-y growth. This shift points to a gradual recovery in investor confidence.

China’s overall VC/PE market is also showing positive momentum. On the investment side, there were 5,612 investment cases in the first half of the year, up 21.9% y-o-y, according to Zero2IPO Research. The tech sector remained the focus of investments, including IT, semiconductors and electronic equipment, biotech/healthcare, machinery manufacturing, and clean technology.

Fundraising activity also rebounded. A total of 2,172 funds raised 728.33 billion yuan in the first half of 2025, up 12.1% and 12.0%, respectively, from the same period a year earlier. However, exit cases fell 43.3% to 935. Of these, 583 were through IPOs, accounting for 62.4% of all exits.

Looking ahead, the Chinese IPO market looks promising. BNP Paribas’ recent research report expects onshore A-shares to maintain a “slowbull” pattern by the end of the year due to capital market reform measures, domestic fund reallocation amid low interest rates, changes in taxation, and progress on tech innovation and self-reliance.

But despite preliminary signs of recovery, the number of new listings is not expected to return to the peaks seen around 2021 in the short to medium term. Investors are advised to exercise patience and seek out high-quality projects, which are more capable of navigating market cycles and delivering strong returns.