It's not unusual for China microcaps to come to the US markets via a reverse shell.
It's the most cost-effective way for them to go public in the US. CFSG, and many other quality China stocks now trading on nasdaq have come to the US market just the way CHFI did.
Do some come through that door that turn oput to be complete scams (see CXTI.PK)? Absolutely.
Do some have a glut of shell sellers with millions of shares to dump at any price the second they can? Yes.
But it has been my experience (dating back to 1999) that most by far are not scams, and many (including CHFI) have pretty clean reverse structures with minimal residual obligations to shell holders.
That said, many US investors will shun Chinese stocks due to the oft repeating mantra that "They're all scams". I think some of it comes from insecurity of many American investors who are becoming increasingly aware that in 5 or 10 years the US will no longer be the leader of the global economy and China will.
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