Wall Streetʼs latest craze for SPACs has reached a new frontier: China.

These so-called blank check companies — which raise money, go public and merge with a private company, typically within two years — have already raised $97 billion in 2021, according to SPACinsider, more than all of last year. And though the vast majority of that money has been raised by American sponsored SPACs, Chinese firms are starting to get in on the action.

But critics say that listing in the U.S. through this trendy shortcut may show something else entirely. SPACs have come under fire because they allow investors to put money into a company with no stated purpose until it finds a target and they facilitate public listings, without requiring private companies to file extensive paper work. “Pre-merger, there are no disclosures,” says Alex Korda, an analyst at New Jersey-based The Edge Consulting Group who has done research on the returns of SPACs over the past five years. “When they say blank check, it is a double entendre — there is no clarity on what type of company they are going to buy.”

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