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Comment by paulsutter | Hacker News Reader

A warning for folks considering working in China (love to hear this debunked if untrue):

https://www.chinalawblog.com/2016/09/the-china-stock-option-...

> no foreign person can own stock in a Chinese domestic company not already listed on a stock market. So any such option or stock transfer is void from the start. Foreigners are not permitted to be shareholders of Chinese domestic companies, nor does China recognize the concept of nominee shareholders.

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This is true, however, very few companies will be purely Chinese entities. Both due to foreign investment and desire to IPO in Hong Kong many will manifest as a VIE in which a foreigner or foreign entity can legally own stock.

you can via ADRs, at least for large companies they usually follow the market. However under the hood this seems unfair. Why does China get to be protective but the the west does not? Just greedy non-chinese companies that don't care where the investments are coming from?

can there be an ADR for a company that is not listed on the stock exchange?

> Why does China get to be protective but the the west does not?

The short answer is the west was seduced by access to the Chinese market and was willing to do one-sided trade deals to get that access.

I believe some of the rules around this stuff just changed due to fallout from the US-China trade war. Furthermore, it's the inertia of a creaking socialist era registration system (broadly three categories: domestic / JV / foreign) which is probably about due to be overhauled, not recent conniving.

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