The Chinese authorities have named the main conditions for companies in the country that are planning to enter the stock exchange, including foreign ones. Sheng Ronghua from China’s Cyberspace Authority quotes CNBC…
Among the broad set of rules that firms must keep in mind prior to listing, Ronghua believes that two are mandatory – complying with Chinese laws and ensuring the security of personal data. These conditions will be included in China’s new policy to protect information infrastructure. It is important to comply with them, especially given the increased repression by the authorities against companies that are listed on the US stock exchange.
The Cyberspace Administration itself is also putting pressure on the Chinese giants. For example, the regulator urged app stores to remove Didi taxi aggregator a couple of days after the company’s IPO in the United States to avoid personal data leakage.
China’s new policy on the protection of information infrastructure will take effect from the beginning of September. It will have to be observed in areas where disruption of work or loss of data in which may endanger national security, the economy, public funds and public interests. These industries include technology and mass communications, energy, transport, water supply, finance and utilities. For non-compliance with the rules, companies will pay fines or be prosecuted.
Many national companies have already suffered from the control of the Chinese authorities. More than 40 IPOs have been suspended on the Shanghai and Shenzhen exchanges, and dozens of firms have come under government repression. Experts associate the stop of the IPO with the investigations of the China Securities Regulatory Commission (CSRC) in the address of intermediaries in transactions.
In addition, Beijing has tightened regulations in almost every area of the economy, from technology to tutoring. Recently, for example, manufacturers of drugs and alcoholic beverages have suffered. Previously, the authorities exerted strong pressure on the IT sector – Chinese giants Alibaba and Tencent suffered multibillion-dollar losses.