China Plans to Ban Foreign IPO Loophole

China Plans to Ban Foreign IPO Loophole

Assessment

Interactive Video

Business

University

Hard

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The video explains the Variable Interest Entity (VIE) structure used by Chinese companies to access foreign markets, particularly in the US. This structure allows companies to bypass foreign ownership laws by transferring economic interests to offshore entities, enabling international investors to own shares without voting rights. While profitable for investors and beneficial for Chinese companies and Wall Street, the VIE structure is legally unstable and faces potential regulatory changes. The video discusses the history, benefits, and legal challenges of the VIE structure, highlighting its significance and future implications.

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2 questions

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1.

OPEN ENDED QUESTION

3 mins • 1 pt

Why has the VIE structure been considered profitable for investors?

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2.

OPEN ENDED QUESTION

3 mins • 1 pt

What changes are expected regarding the VIE structure in the near future?

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