On December 15, domestic Internet company Zhejiang Netsun Co Ltd listed on the GEM, becoming the first IT company to list domestically, while most of its peers, such as Sina.com and Baidu, went to NASDAQ.

"Attracted by the improving domestic capital market environments, foreign VC funds will attempt to raise renminbi funds and conduct direct investments in China with renminbi instead of US dollars to shun the limitation of the M&A Rules," Zero2IPO says in one of its reports.

Meanwhile, foreign stock exchanges such as LSE's second board AIM are actively engaged in a model to allure those VC or private equity funds who make direct renminbi investments in China to list in London.

"It is the same as long as it represents the 'China concept,'" a source close to AIM says.

A-shares may not be the best

But is the A-share listing now a solution forever?

Even though Chinese stock market composite witnessed a 130 percent jump in 2006, the rise was mostly contributed by the excessive money inflow into the market driven by the large trade surplus and speculation on the renminbi's appreciation.

"It is true that the A-share market is improving toward a bullish market, but the procedure in approving an IPO compared to a developed market is still lengthy," some analysts point out.

The lengthy procedure, however, might not be a big problem for domestic firms listing as regulators are actively working on a faster IPO review procedure.

But on a fundamental level, Chinese public companies do not change that quickly in aspects such as transparency or corporate governance. The Chinese stock market is far from sophisticated. Actually, a number of analysts and officials have warned of a potential A-share bubble in the near future. The current A-share listing fever requires companies to keep a cool head.

The truth is no matter which stock market is the hottest currently, it is widely believed that to list overseas will help companies cultivate their corporate governance and transparency under a much more sophisticated regulatory environment and investment culture. In this sense, there should be a way for Chinese companies to list abroad.

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