Is China over?

This week may be the one that breaks the seven-month Chinese initial public offering drought. Chinese social media site YY Inc. is planning to raise as much as $97.5 million, according to the Wall Street Journal.

Here are a few offering and other details from the story:

The IPO scorecard has been spotty since superstorm Sandy hit the U.S. East Coast late last month. Restoration Hardware Holdings Inc. rose 30% on its Nov. 2 debut, but since then, two companies have halted capital-raising plans and three more postponed offerings. On Friday, Ruckus Wireless Inc. fell in its first day of trading.

Given the market’s shakiness, the an offering of up to $97.5 million from YY, a company that boasts more than 400 million registered users on its online platform, is liable to face keen investor scrutiny.

This year is shaping up to be the slowest for IPOs from Chinese companies since 2008, according to data from Ipreo, a market-intelligence firm. Just two China-based IPOs have hit the U.S. market this year: e-retailer Vipshop Holdings Ltd., in March, and Acquity Group Ltd., a provider of digital marketing and e-commerce services, in April. Four Chinese IPOs have been delayed or withdrawn this year, exceeding the total that have made it to market in the U.S.

IPOs from Chinese firms were commonplace a few years ago. As recently as 2010, some 36 Chinese IPOs were listed in the U.S., representing nearly a quarter of all new offers that year.

The flow dried up after a handful of companies were hit by accounting scandals that curbed investor demand for Chinese listings. The incidents raised corporate-governance questions about Chinese companies and triggered heavy selling in their shares.

The company, which filed to go public in mid-October, offers online games, karaoke, music concert and educational services through its platform, according to Reuters. Here’s a few more tidbits about the firm and sentiment from Reuters:

Only Chinese companies with several quarters of profitability and revenue growth of over 50 percent will be able to grab U.S. investor interest, investors say.

“There’s definitely been a cleansing process and improvement,” said Kevin Pollack, managing  at Paragon Capital in New York. “There are tremendous opportunities if you know what red flags to look out for.”

While it’s unlikely that the U.S. market will be flooded with Chinese listings in the near term, bankers, lawyers and investors say, improved sentiment may lead an uptick in deals, particularly among fast-growing technology companies.

“You can sell the sizzle on a company like YY,” said Dennis Galgano, head of international investment banking at Morgan Joseph, who works with Chinese companies. “It’s up the alley of what the market likes in terms of Chinese companies – you see 400 million users and it gets people doing the math in terms of future growth.”

A few Chinese tech companies are also eyeing the recent success of U.S.-based software IPOs like Workday, Palo Alto Networks Inc and ServiceNow Inc as a signal that the market may be receptive to their deals, too.

Other Chinese companies exploring a U.S. listing include online travel site Qunar, online retailer 360buy.com and online shopping site LightInTheBox, according to sources familiar with the companies’ plans.

But many believe that given China’s slower growth prospects that investors may pull back from the region. There’s also continued uncertainty about the level of regulation and transparency that the new government will provide.

It’s also interesting to note that technology companies can be the first to suffer the wrath of the Communist regime. They’re know for trying to control the flow of information, keep people from connecting and in general block unfavorable coverage. Any investor in a tech company, especially a social media platform, will have to make sure they’re comfortable with the level of risk this presents.

Obviously in such a highly populated nation, the firm has a lot of untapped potential, particularly as Chinese people have more disposable income. But many consider the timing problematic since growth is slowing.

Here’s a link to a Forbes contributor interview with YY CEO David Li. He talks about the most successful technology companies being the ones who are able to monetize immediately. Meaning, he’s taking what he can now, instead of waiting to see if he can expand or capture more market share before going public.

Telling, isn’t it?