Chinese companies have raised twice as much capital in equity markets so far this year as those in the US and Europe combined – even as a plunge in mainland markets has triggered turmoil around the world.

The unexpected bright spot, however, is more the result of China’s clunky regulatory process than a carefully planned cash grab, according to bankers, who say the apparent deal spurt is the result of the length of time taken for approval to be granted – an uncertain process.

Globally, equity fundraising is running at its lowest in four years, with companies in the US and Europe raising just $9.9 billion, according to Dealogic – less than half their levels at this point in any of the past three years. Companies have, however, raised $19.7 billion in China this year largely via follow-on offerings, even as the Shanghai and Shenzhen benchmark indices have lost 22.3 per cent and 25.8 per cent so far this month.

"The approval processes in China can be long and some people are willing to enter the market because of the time they've spent in the queue to get here," said Aaron Arth, head of equity capital markets for Asia excluding Japan at Goldman Sachs, who added that executives were also developing some immunity to the volatility.

“In China, once you get approval your hands are pretty tied,” said another equity specialist. “If you don’t get it done now, you don’t know when you’ll get it done.” By this point last year, Chinese markets were seven months into a year-long rally, yet companies raised just $3.3 billion in January.

While secondary offerings – the bulk of this year’s deal flow – do not require quite the same effort with regulators as new listings, approvals can still take months to come through, bankers said.

Last year was the first in five years that Asia raised more equity for companies than either the US or Europe, pulling in $305 billion compared with $266 billion and $248 billion respectively. – Copyright The Financial Times Limited 2016