‘Special Purpose Acquisition Companies’ offer Chinese companies what they want: a quick and easy way to get foreign capital and a foreign listing.
Blank check companies are flooding the boards, and now Chinese companies want in. Credit: Christopher Berry, Creative Commons
Wall Street’s latest craze for SPACs has reached a new frontier: China.
These so-called blank check companies — which raise money, go public and merge with a private company, typically within two years — have already raised $97 billion in 2021, according to SPACinsider, more than all of last year. And though the vast majority of that money has been raised by American sponsored SPACs, Chinese firms are starting to get in on the action.
SPACs, or "special purpose acquisition companies," are now a quick and easy way for Chinese companies to go public and access foreign capital, though some analysts worry that the already speculative structure is riskier in the China context.China's regulatory enforcement, for instance, is considered weak when compared to the U.S. and European countries.
Over the past year, established Chinese firms like Primavera Capital Group,The company set up Primavera Capital Acquisition and raised $360 million in January with plans to targe
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