Where have all the Chinese IPOs gone?

By Phil Wahba

NEW YORK (Reuters) - This may be the year that modern China comes of age thanks to the Olympics, but you wouldn't know it in the U.S. IPO market.

After a record number of Chinese companies sold shares through initial public offerings in the United States in 2007, Chinese IPOs have ground to a near halt here.

There are two Chinese offerings planned for the next week, but even if they both reach the market -- always a question in today's turbulent markets -- it will only bring the number of Chinese offerings to four so far this year.

Last year, a record 31 Chinese companies raised $6.8 billion, according to Thomson Reuters data, led by some blockbuster deals, including the billion-dollar offering by Giant Interactive Group Inc (GA.N: Quote, Profile, Research, Stock Buzz), an online game developer; and the debuts of LDK Solar Co Ltd (LDK.N: Quote, Profile, Research, Stock Buzz), a renewable energy company, and China Nepstar Chain Drugstore Ltd (NPD.N: Quote, Profile, Research, Stock Buzz), which raised $486 million and $384 million, respectively.

While the bear market conditions in the United States this year are clearly one reason for the slowdown, there is also growing concern the U.S. has lost its cachet for Chinese companies, which now have many alternatives in Asia and Europe.

"An ongoing trend in the past two years has seen companies forum shop for their IPOs, so the U.S. is no longer the natural default choice," said Colin Diamond, an attorney specializing in IPOs for the New York law firm White & Case.

One reason often cited is the tough conditions for listing in the U.S. market following the introduction of the Sarbanes- Oxley corporate governance law in 2002.

The law, introduced following the Enron and WorldCom corporate collapses and their accompanying scandals, means that companies wishing to list and remain listed have to spend a lot of time and money making sure their accounting controls are in good shape.