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President Xi Jinping has finally spoken about what his superiors have already seen as a threat to national security and a weakening of China’s major markets – their failure to attract the country’s top companies, who have flocked to New York to raise money.
The temporary movement of businesses and the popularity of US corporations is now over. After spending a long time looking at the security situation in Xinjiang, Hong Kong and Chinese livestock economic sector, Xi turns to well-known New York-based experts on development issues and how they run their business.
The starting point for the new campaign was Didi Chuxing’s idea to continue with the $ 4.4bn initial US donation just before the festive season. one hundred years the establishment of the Chinese Communist Party. The passenger transport company did so though anxiety at home so that US regulators can reach out to its customer information teams.
In response, Cyberspace Administration of China, the country’s internet administrator, on July 2 ordered Didi to stop using users while waiting for a review of data protection measures. US stocks for the newly-launched company, which resumed on Tuesday, collapsed 20 percent.
So that no one misses the message, on Tuesday night the Chinese National Council and the party’s Central Committee issued a directive that could lead to closer scrutiny of foreign IPOs. As a result, says Chen Long in Plenum, based in Beijing, CAC “could become a legitimate leader [tech] IPOs ”.
Although the methods and requirements have not been clarified, it is clear that the ancient Chinese intellectual property rights that were included in the list of foreign regions at the time and where they saw them were not resolved. The new law is also in line with “Beijing’s growth in self-reliance and transparency,” said Eswar Prasad, a Chinese economist at Cornell University.
The first investor in Didi, who had the opportunity to sell his shares before the study was announced, said the rules were intentionally unreasonable. “China can justify anything in the name of national security, just like the US,” the money launderer said. “Xi has stated firmly that he does not want top Chinese companies to IPO in the US.”
Surprisingly, many of Washington’s leading Chinese leaders, such as Florida senator Marco Rubio, no longer want top Chinese companies to go for IPOs in the US.
In addition to Didi, which has more than 490m users, Chinese-named Chinese experts include Sina Weibo, a Chinese-like Twitter user, and ecommerce giant Alibaba. The latter was the only company listed in New York for five years before graduating from high school in Hong Kong in 2019. Just imagine what Washington Chinese businessmen would like if Twitter and Amazon were just listed in Shanghai.
Washington’s opponents in China should not demand what Xi wants, and vice versa. If Xi is right about the fact that New York’s Alibaba, Weibo and Didi lists are the best in China, then they are probably right in the US. But on Tuesday, Rubio told the Financial Times that allowing Didi to register in New York was “careless and careless“.
Rubio and many others at Capitol Hill argue that Chinese companies have so far been able to evade US scrutiny, as Beijing does not allow them to open their books to foreign accountants.
Xi officials are concerned that this could change. Legislation signed by Donald Trump during his final year in office could force the removal of any company that does not accept scrutiny by the Washington-Public Accounting Oversight Board for three years.
Xi and Rubio probably agree that three years is too long. Thanks to Didi debacle, everyone can get what they want sooner than that.
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