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Major Chinese companies with the knowledge of more than 1m users will need to review security before offering shares in foreign markets, the country’s internet regulator said on Saturday.
An announcement from Cyberspace Administration in China came less than a week from the State Council, the Chinese prime minister, and the Central Committee of the Chinese Communist Party that the new law requires police to list foreign sources, which have escaped government control.
President Xi Jinping’s advisers are deeply concerned about the list in US, where more than 30 Chinese companies earned $ 12.4bn in the first half of this year, according to Dealogic.
The CAC Act affirmed that it was a dynamic organization under the auspices of foreign Chinese corporations. The regulator will notify the registrant of the IPO if he / she provided his / her security review within 60 business days, but this may take longer if there is a non-compliance.
On July 2, China’s internet administrator told Didi Chuxing, China’s largest group, to stop signing users on data protection center, just days after completing the $ 4.4bn IPO on the New York Stock Exchange.
The CAC wanted Didi to delay its US IPO, but it has no legal power to enforce it. The moderator was concerned with what the team included, including place government hearing and installation facilities, can be obtained by external supervisors.
The U.S. has imposed sanctions on foreign companies for three years or so after they were forced to lose their jobs, but Beijing has ordered Chinese groups not to do so. U.S. political leaders have said Didi’s remarks should be in line with the Chinese companies listed in New York.
Didi shares fell further 20 percent Tuesday, their first day of trading after the CAC intervened.
The CAC also banned the download of a large car program last Sunday. Last night, it extended the ban to 25 other Didi-related programs.
In a sign of the rise of China’s largest technology base, market regulators in the country have also opted for a deal with Tencent on Saturday that would be a major video producer.
The State Administration of Market Regulation said the merger of two US-registered brands, DouYu and Huya, would have created a regulatory body of more than 70% of the market.
Tencent, which also uses the WeChat messaging program and one of China’s largest online payment services, confirmed the deal in October, just weeks before Xi administrators banned the first $ 37bn offer from Jack Ma’s online group. Ants Group, which would be the largest of all. DouYu and Huya have a combined $ 5.3bn market.
The closure of the ants’ IP’s was the first salvo of major cases that had gripped technology giants including Ma’s ecommerce flagship, Alibaba, Tencent and Didi.
Tencent, Didi’s third largest shareholder with a share of 6.8%, said he had accepted the DouYu-Huya consortium and had “fulfilled our responsibilities”. Tencent had already fined her for not asking for more information.
Scott Yu, a security expert at Zhong Lun Law in Beijing, said this was the first time that market regulators had banned domestic cooperation. “It will help other companies to be more careful when trying to compare domestic products,” he said.
Tencent’s business continues to deteriorate. For the first quarter it reported better than expected 25% per annum add in cash, up to Rmb135bn ($ 20.8bn).
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