On-chain Synthetic Contracts for Chinese Tech Firms Risk Weakening Domestic Finance

Synthetic perpetual contracts for firms like Changxin Technology on overseas platforms may divert pricing power and capital, potentially weakening China's tech finance support capabilities.

Woofun AI reports that Zhao Yao, a researcher at the Chinese Academy of Social Sciences, warns that overseas platforms are launching synthetic perpetual contracts linked to Chinese tech companies such as Changxin Technology. These instruments, settled in stablecoins like USDC and USDT, do not represent official equity or voting rights but allow global investors to shape price expectations and liquidity ahead of domestic markets. Zhao Yao argues that this early establishment of offshore trading venues could accumulate capital and pricing activity abroad, thereby diminishing the capacity of domestic technology finance to support innovation. Without robust RMB-based digital settlement mechanisms, China risks losing international pricing power and dominance over financial infrastructure for these assets.