If approved, the number of listed companies in China could swell by around 30%.

WSJ: China's IPO Doors Likely To Stay Closed

Ian Bremmer and Nouriel Roubini, respectively president of the Eurasia Group and a professor at New York University, pointed out in The Wall Street Journal last week that 39 of the 42 Chinese companies listed among the Fortune 500 are state-owned, and three-quarters of China's 100 largest publicly traded companies are state-controlled.

WSJ: China Might Have Over-Reached Itself

Nearly 30% of the companies that listed in the U.S. came from other parts of the world, and China was the most common source of foreign listings.

WSJ: IPO Activity Picked Up in 2010

But in late 2010, investors started to fall out of love with stocks from China as auditors and short sellers began accusing small Chinese companies listed in the U.S. of having lied to investors and misrepresented the true extent of their businesses.

WSJ: After Low Pricing, China's YY Gains on Nasdaq

Small-cap meat processor Zhongpin plunged 5% after U.S. regulators said they were looking into the possibility of insider trading at the company in connection with a privatization bid, the latest in a long string of governance issues involving U.S.-listed companies from China.

FORBES: Lujiazui Breakfast: News And Views About China Stocks -- April 10

As evidenced by the devastation of the market values of U.S.-listed Chinese companies that has occurred, overcoming the information and credibility gaps that exist between China and the rest of the world will continue to be a major challenge for foreign investors.

FORBES: China Investment Summit