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Alibaba's Stock Market Quest

Why the Chinese Internet company won't list in Shanghai.

It looks ever more likely that the world's largest tech IPO since Facebook will have to wait until next year. China's Alibaba, an online trading portal, expects to raise at least $10 billion when it lists, but it is struggling to figure out where it will sell its shares. New York and Hong Kong are the main competitors.

Less often discussed is that Shanghai is not on the short list, or even the long list. This is the result of China's slow pace of financial reform. Twenty-three years after the Shanghai Stock Exchange opened,...