Even as US stock indexes hit record highs in recent months, many Chinese businesses eyeing initial public offerings in New York have become increasingly hesitant.

Only two companies from China listed shares in the United States in 2012 - online retailer Vipshop Holdings Ltd last March on the New York Stock Exchange, and social-media platform YY Inc in November on Nasdaq.

That was the lowest yearly total since 2000, according to Zero2ipo, a Beijing-based data provider that tracks capital-raising, IPOs and deal-making among Chinese companies.

During the same period, 38 companies from the Chinese mainland were listed in the Hong Kong Stock Exchange.

Investors' enthusiasm has also been sapped. Last year, 247 private-equity and venture capital firms worldwide raised just $9.31 billion to invest in Chinese businesses, a drop of two-thirds from 2011.

That's one reason Jack Ma, founder and chairman of Chinese e-commerce giant Alibaba Group Holdings Ltd, was the star last week at a Credit Suisse Asia investment conference in Hong Kong.

The English teacher-turned-entrepreneur drew attention and surprised laughter from his audience when he answered a question about the profitability of Alibaba and the platforms on which it facilitates other firms' e-commerce.

"They say, 'Please make money because if you don't make money we go bankrupt,'" Ma said. "I say, 'Don't worry about us - we are making money. I think when we IPO you'll know the numbers.'"

Alibaba - led by its business-to-business website Alibaba.com, eBay-like marketplace Taobao.com and Alipay, which is akin to PayPal - has been regarded as the Next Big Thing in technology IPOs from China. Analysts have estimated the company's value from $50 billion to $128 billion.

US-based Yahoo Inc, which owns almost a quarter of Alibaba's shares, disclosed earlier this month financial results of the Chinese company. Yahoo said Alibaba had a profit of $484 million through the 12 months ended on Sept 30, on revenue of $4.04 billion - up from the previous 12-month period by 80 percent and 70 percent, respectively.

Other major Internet companies said to be considering an IPO overseas include China's No 1 business-to-consumer e-commerce provider 360buy.com, online publisher Cloudray and automotive-information portal Autohome.com.cn.

The challenges for Chinese companies to list their stock in the US are huge, however.

Since 2010, US short-sellers Muddy Waters LLC and Citron Research have looked into accounting practices of some US-listed Chinese companies and found what the two firms characterized as misleading or fraudulent financial data. Some reports prompted enforcement actions by US securities regulators, while others were met with public denials.

Such allegations have eroded investor confidence. US authorities have been negotiating with their Chinese counterparts for access to accounting records of companies in China.

Another concern for US investors and regulators are "variable-interest entities", or VIEs. This mechanism enables a foreign company to take over a domestic firm and then list its own shares on a stock exchange in the domestic firm's country. Nearly all of the major Chinese Internet companies listed in the US took this route.

VIEs are considered risky because an investor doesn't put money directly into the Chinese company but rather an offshore entity that can sign contracts and otherwise do business with the domestic firm. The mechanism makes US investors uncomfortable because it theoretically leaves the VIE entity to exposed to Chinese securities regulations.

The challenges have blocked many Chinese companies from raising capital on international markets, while foreign investors, stock exchanges, banks, accountants and law firms have been unable to benefit from the growth in China's economy, the world's second-biggest.

China's Internet economy jumped more than 50 percent last year to 385 billion yuan ($62 billion), according to Shanghai-based consulting firm iResearch.

It's a pity that companies and investors in the world's two leading economies can't find a way to avail themselves of lucrative opportunities. The tasks ahead are formidable, such as building confidence and trust between Chinese companies and US investors, and establishing a framework for cooperation between regulators in both countries.

These are long-term goals, but a quick boost to markets would be an IPO by a company with the size, international profile and growth potential of Alibaba.

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