Everybody knows China is the world's biggest factory for blue jeans, sneakers, TVs and cell phones. Soon it could be the world's biggest generator of IPOs. Chinese entrepreneurs are turning wealth made in manufacturing into new companies, and China already rivals the U.S. and Japan for spending on research and development. Those investments in R&D are leading to new companies in biotech and computer tech. A huge number of China Inc. startups are picking the Shanghai or Shenzhen markets to take their companies public. They're racing to go public to take advantage of the booming domestic market -- the main Shanghai index has tripled since 2005. Capital raised by new listings in China is set to exceed $52 billion this year, putting the mainland on track to become the world's leading center for public offerings this year, according to the Financial Times.

The popularity of local stock markets for new offerings has exchange managers in Hong Kong, London and New York nervous that they'll no longer benefit from hosting Chinese IPOs. According to Richard Sun, a partner with PwC quoted in the Financial Times article, capital raised by A-share listings in Shenzhen and Shanghai will reach Rmb400 billion ($52.6 billion) this year. That prediction is double a January forecast by PwC. The consulting firm reports that the value of Chinese A-share listings reached Rmb169 billion in the first six months of 2007. It sees an even stronger market for the second half of the year.

Can anybody get in on the deals? Not easily. Mainland A-shares are traded in renminbi and are open only to local Chinese and designated foreign institutions. Most non-Chinese investment firms are locked out of underwriting and trading local stocks. The exceptions are Goldman Sachs Group (NYSE: GS) and UBS (NYSE: UBS). Beijing has given both the go-ahead to participate in mainland IPOs. Meanwhile, Washington is lobbying China to ease restrictions.