Shein tried to shed China. Its IPO now hinges on embracing it

Shein founder Xu Yangtian recently stood before Chinese provincial officials and declared that the Singapore-headquartered company owes its success to Guangdong, acknowledging the province as the company’s roots. He also pledged 10 billion yuan (US$1.4 billion) to support China’s “high-quality development” agenda.

It was a homecoming and a confession of loyalty. Shein’s years-long public narrative – that it was a global fashion company that happened to source from China, rather than a Chinese firm that happened to sell globally – collapsed under the weight of its contradictions.

A Shein advertisement board in a shopping mall in Malaysia / Photo credit: Marius Karp / Shutterstock

This shift did not come out of nowhere. After failing to secure regulatory approval to list in New York and London, Shein has pivoted toward a potential Hong Kong IPO, a process that will require the blessing of Chinese authorities.

However, soon after Xu’s speech, Shein began filing copyright complaints to remove videos of the speech from Chinese news sites and social media. This raises another question: Why deliver a declaration of loyalty while simultaneously trying to contain its reach?

While the incident may appear to continue Shein’s “foot in both camps” approach, a closer look suggests the company has chosen a side.

Global Chinese companies like Shein tried to distance themselves from China to access Western capital. Now, geopolitical reality is forcing them to reverse course.

China-shedding

For years, Shein pursued what many Chinese companies have attempted: China-shedding. The strategy aims to reduce perceived ties with China to lower political, regulatory, and reputational risk in global markets.

In practice, this often means restructuring the holding company, relocating headquarters to Singapore, and building a public narrative that distances the firm from its Chinese origins.

Companies that pursue this path often learn the same lesson: Opportunistic China-shedding satisfies no one.

See also: How China’s AI surge defies US spending power

Shein’s predicament illustrates a broader shift facing Chinese-origin companies operating globally. For much of the past decade, relocating a holding firm offshore and adopting the language of a “global company” was often enough to reassure investors.

Today, that playbook is far less effective. Governments increasingly treat corporate identity as inseparable from supply chains, data flows, and political alignment. Companies that built global businesses on Chinese industrial ecosystems now find themselves navigating a world where neither side accepts strategic ambiguity.

Prodigal son