China's government wants more "red chip" companies -- those listed and incorporated in Hong Kong -- to list on the yuan-denominated, domestic A-share market.

Those companies include China Mobile and PetroChina. With dual listings, Beijing hopes to even out company valuations on the Hong Kong and mainland exchanges.

China's A-share market is largely closed to foreign investors; most Chinese are unable to buy shares in Hong Kong or other markets.

Booming stock markets -- the Shanghai exchange is up 108 percent this year -- have fueled domestic IPOs. Chinese mainland companies raised more IPO money than any other country last year and will do so again in 2007, says Thomson Financial.

China's consumers have shifted savings from banks to stocks. Many Chinese firms have invested in the booming stock market to boost earnings.

In the first nine months of 2007, 139 Chinese firms went public on domestic markets, says Thomson Financial. The mainland should easily surpass the 2004 peak of 156 IPOs.

Hong Kong IPOs also are on a record pace, though proceeds will likely fall well below 2006's US$43 billion. That's because mainland banking giants -- the Industrial & Commercial Bank of China and Bank of China -- had huge IPOs last year.

Chinese firms that trade in the US also tend to have better accounting, thanks to tougher listing and governance rules. As LDK's 26 percent swoon last week showed, bookkeeping charges still dog Chinese firms.

Those same requirements deter some Chinese companies from trading in the US. It's less expensive to list in Hong Kong, says Oberweis.

"The traditional reasons of listing in NY -- to gain transparency and liquidity -- I think is being challenged," said Oberweis.

"The logical place to attract international investment is probably Hong Kong, which has demonstrated that it has the liquidity to do big deals.

"Are there people who would buy a stock in New York that aren't in Hong Kong? Yes, there might be Joe Retail. But big institutional buyers buy anywhere in the world."

Aided by big bank deals, IPOs by Chinese companies in Hong Kong raised US$566 million on average from January 1, 2006, through September 30, says Matthew Molberger, analyst at Renaissance Capital. US IPOs of Chinese companies averaged US$227 million over the same period.

Chinese firms have outpaced other offerings, according to Renaissance Capital's IPO Index. They've averaged 40 percent gains since January 1, 2006. Other IPOs are up 33 percent on a float-weighted average.