Xi Jinping President finally, his administration are working on what they saw as a long time, obvious weakness of the persistent risk of national security and China’s capital market.
The steady flow of business and fame on the US Stock Exchange is now over. After spending most of his second semester focusing on the recognized national security risks in Xinjiang Uygur Autonomous Region Hong Kong And in China Financial sector, Xi is paying attention to the tech champions of the countries listed in New York and the data driving their business.
The ostensible impetus for this new campaign was Didi Chuxing’s move to push for a $ 4.4 billion initial public offering on the eve of the celebration. 100th anniversary Of the founding of the Chinese Communist Party.The dispatch company nevertheless did so Concerns At home, US regulators will have access to a pile of customer data.
In response, China’s Cyberspace Administration, the country’s Internet regulator, ordered Diddy to stop recruiting new users on July 2, while waiting for a review of data security practices.They fell when US trading of the company’s newly listed stocks resumed on Tuesday 20 percent..
To make sure no one misses the message, on Tuesday night, the State Council of the Chinese government and the party’s central committee issued a rare joint guideline that would lead to much more scrutiny of foreign IPOs. As a result, Beijing-based consultancy Chen Long of Plenum said CAC “could be the de facto supreme authority for approval.” [tech] IPO “.
The detailed steps and requirements have not yet been clarified, but it is clear that the freedom before the Chinese tech champion to list its shares abroad was revoked at a time and place where it seemed appropriate. Eswar Prasad, a Chinese financial expert at Cornell University, said the new policy is in line with Beijing’s “increasing importance of independence and more inward-looking policies.”
An early investor with Diddy, who was lucky enough to sell his stock before the investigation was published, said the regulation was intentionally ambiguous. “China, like the United States, can justify anything in the name of national security,” investors said. “Xi makes it clear that top Chinese companies do not want to do an IPO in the United States.”
Ironically, many of Washington’s leading Chinese hawks, such as Florida Senator Marco Rubio, don’t want top Chinese companies to do an IPO in the United States.
In addition to Diddy, which has more than 490 million users, Chinese tech champions listed in the United States include Sina Weibo, who runs the Chinese Twitter equivalent, and e-commerce giant Alibaba. included. The latter was a New York-only listed company for five years before completing its second listing in Hong Kong in 2019. Imagine the reaction of Chinahawk in Washington when Twitter, Amazon, etc. were listed only in Shanghai.
Major Chinese critics in Washington shouldn’t want what Xi wants. The reverse is also true. If Xi says the New York list by Alibaba, Weibo, Didi, etc. is bad for China, they are probably in a good balance for the United States. But on Tuesday, Rubio allowed the Financial Times to list Diddy in New York.Reckless and irresponsible“.
Rubio of Capitol Hill and many others oppose the fact that Chinese companies have previously been able to circumvent US audits because Beijing has not allowed foreign accountants to open books. There is.
The Xi administration is concerned that this could change. A law signed by Donald Trump in his final year in office could delist companies that do not agree to an audit by the Washington-based Public Company Accounting Oversight Board for three years.
Xi and Rubio agree that three years is probably too long. Thanks to Didi’s blunder, they may both get what they want much sooner.