Overseas listing as a policy tool: Evidence from China's H-shares

► We argue two reasons for China share-issue privatizes (SIP) state-owned enterprises (SOEs) in Hong Kong. ► Market order reason is: China market cannot absorb large-scale SIP activities and do SIP in Hong Kong. ► Governance reason is: Chinese SOEs leverage on Hong Kong better governance through cross-listing. ► We examine 92 Chinese firms listed in Hong Kong and find supporting evidence for both arguments.