SHAREHOLDERSI wrote to Whiteguy:
"Shanghai also knows that the stock will be significantly higher after their IPO which I guess will come out on the Hong-Kong exchange. Another way of putting it is --they know who is selling now and they know who is going to be buying later"
Thank you very much for reminding me that a company whose stock is already trading in a public market does not float an Initial Public Offerring. After fifty years in the securities field, I should know this and, of course, I do.
In reality, I am responding to your post in which you state quite correctly that the government of China does not normally finance new technology coming into the country.
The procedure as I understand it would move in the following fashion--
Ministry of Agriculture makes it known to the bureaucracy it wishes to introduce this technology to China.
The bureaucracy chooses a proven entity to sponsor the entrant and grants the franchise.
The franchisee (Shanghai in this case) initiates a public offerring to exploit the franchise.
Obviously, there are variations in the financing. However, my guess is, by the way they have moved, and other indications, this deal has enough pizzaz to warrant an Initial Public offerring.