Beijing looks to ban Chinese tech firms from foreign listings
By Iain Gilbert
Date: Wednesday 27 Oct 2021
(Sharecast News) - China will look to continue its crackdown on its tech sector by way of a ban on firms with large amounts of sensitive consumer data from going public in the United States.
According to the Wall Street Journal, officials at the China Securities Regulatory Commission will propose new laws that will potentially stop Chinese internet companies from floating in the US.
The new rules will likely aid Beijing in exerting more control over the complex corporate structure that some of the nation's biggest tech companies use to sidestep restrictions on foreign investment - with technology giants like Alibaba, Didi Global and Tencent all using a corporate structure known as a Variable Interest Entity to attract capital from abroad and list on foreign markets.
While companies with less sensitive data, like those in the pharmaceutical industry, will still likely receive Chinese regulatory approval for foreign listings, Chinese lawmakers view sectors such as the internet, telecommunications and education sensitive on the basis of political or national-security concerns.
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