China Announces New Rules for 'Chinese Companies Aiming to List Overseas'



The Chinese government has announced a new rule that if a technology company with 'more than 1 million user data' is listed outside China, it must undergo a security review by a government agency before listing. Several media outlets report that this is a new rule that makes it difficult for Chinese companies to list overseas.

Chinese fitness app pulls New York IPO plan after Didi debacle | Financial Times

https://www.ft.com/content/7123266e-94c1-45cb-a133-8f1c0b907c25

Beijing Blocks Merger, Tightens Data Rules as Post-Didi Crackdown Speeds Up --WSJ
https://www.wsj.com/articles/beijing-blocks-merger-tightens-data-rules-as-post-didi-crackdown-speeds-up-11625898515

China Tightens Rules on Foreign IPOs in New Blow to Tech Firms --Bloomberg
https://www.bloomberg.com/news/articles/2021-07-10/china-tightens-foreign-ipo-rules-for-firms-with-large-user-data

China widens clampdown on overseas listings with pre-IPO review of firms with large user data | Reuters
https://www.reuters.com/world/china/china-widens-clampdown-overseas-listings-with-pre-ipo-review-firms-with-large-2021-07-10/

Chinese e-commerce platform Meicai becomes latest mainland firm to shelve US IPO plan as tightened scrutiny unnerves issuers | South China Morning Post
https://www.scmp.com/business/banking-finance/article/3140560/chinese-e-commerce-platform-meicai-becomes-latest-mainland

On June 30, 2021, the Chinese ride-hailing service 'DiDi' was listed on the US stock market. However, the China Cyberspace Administration (CAC) has suspended new user registration for the DiDi app, saying that 'the DiDi app improperly collects and uses user information and violates the law,' and said that the Chinese app store Instructed to remove the app from.

What happened when the ride-hailing service DiDi was blocked by the Chinese authorities immediately after its listing in the United States and the stock price plummeted? --GIGAZINE



The Chinese government has described this measure as 'to prepare for data security risks and to protect national security and the public interest,' and to prevent a situation like DiDi from happening, an IPO by a Chinese company. Announced that it will tighten regulations on. However, at this point, other details were not revealed, and it was unclear what kind of regulations would be applied.

The Chinese government has tightened regulations on IPOs, and there are voices saying that it will be difficult for Chinese companies to list overseas --GIGAZINE



Meanwhile, on Saturday, July 10, 2021, CAC said, 'Technology companies with more than 1 million user data must undergo a government-led cybersecurity review before listing overseas.' We announced a new rule. The CAC describes the rule as 'focusing on the risks of data being affected, controlled or manipulated by foreign governments after listing abroad.'

In addition, Chinese companies aiming to be listed overseas will be required to submit IPO materials to CAC for cyber security reviews. In a cybersecurity review, the CAC described national security risks as 'risk of disruption of the supply chain due to political, diplomatic, trade and other factors' and important data risks as 'abused by the government after listing abroad. It is said that there is a risk, and it seems that we will examine whether the countermeasures against these are perfect.

The rules announced this time are still in the pre-enforcement stage, and CAC is seeking feedback for improvement.



Feng Chucheng, an analyst who works as a partner of Beijing research firm Plenum, said, 'The threshold of'user data for 1 million people'is very low and basically applies to most Internet companies aiming for an IPO. It will be done, 'he said, pointing out that almost all Internet companies seeking to go public overseas will be subject to the new rules.

Bloomberg said the new rules announced by CAC could have a significant impact on Chinese tech companies such as ByteDance, the owner of TikTok considering an IPO, and Lalamove, an on-demand logistics and shipping company. I wrote.



It has also been revealed that Meicai, an e-commerce platform that connects restaurants and fresh food suppliers, has postponed its listing plan in the United States due to the tightening of regulations by the Chinese government. Meicai is a Beijing-based company that successfully raised $ 6.4 billion in September 2018. I had submitted it, 'reports the South China Morning Post.

in Note, Posted by logu_ii