Beijing’s tighter scrutiny of foreign capital after the Meta-Manus deal is forcing Chinese companies to rethink a popular ownership structure that fuelled a decade-long listings boom.Groups including Tencent-backed AI start-up StepFun and fast-food chain Home Original Chicken have rushed to dismantle their so-called red-chip structures ahead of planned overseas listings, according to three people familiar with the process.
Beijing-based AI unicorn Moonshot, Alibaba-backed autonomous driving group DeepRoute.ai and short-video app developer Kuaishou’s AI unit Kling are also considering reincorporating in China.
Red-chip structures entail setting up a company outside mainland China, often in a tax haven such as the British Virgin Islands or Cayman Islands, to own the Chinese operating entity.