Because of the high economic uncertainty inherent in the privatization process, financial markets in China are characterized by large information asymmetry. Using data of 348 non-financial firm-commitment initial public offerings (IPOs) between January 1994 and December 1999, I investigate the informational role of leverage and the signaling role of insider ownership and IPO underpricing. I find that: (1) in contrast to the prediction of conventional theory of capital structure signaling, debt does not convey good news in the Chinese market; (2) underpricing is positively correlated with pre-IPO leverage, a proxy for ex ante information asymmetry; and (3) insider ownership and underpricing are a pair of reinforcing signals of firm quality.