Chinese companies that want to go public abroad have to adjust to greater control by the Chinese state. It is about data security, it is said from Beijing.
China is tightening controls on Chinese companies that are publicly traded abroad. The new regulations have far-reaching implications for aspiring Chinese firms to raise capital on foreign stock markets such as New York and Hong Kong.
The new rules are particularly aimed at “data security, cross-border data flow and the management of confidential information,” as a document from the State Council in Beijing emerged on Wednesday.
The background to this is, among other things, the government’s concern that Chinese companies traded abroad could be forced by the local authorities to make their growing amounts of data available. The new rules are intended to better regulate the confidentiality and responsibility for the security of information for companies traded abroad, the document says.
The announcement follows the surprising action taken by the authorities against the leading Chinese driver service agent Didi Chuxing. The Uber rival went public in New York last week, even though cyber oversight had suggested a postponement, according to press reports. Shortly after the successful IPO, the Chinese authorities started investigations into violations of the handling of the collected data, whereupon the share price collapsed massively.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
