Beautiful Virgin Islands

Tuesday, Jun 03, 2025

China Reportedly Planning to Ban User Data-heavy Tech Giants From Being Listed on Wall Street

China Reportedly Planning to Ban User Data-heavy Tech Giants From Being Listed on Wall Street

New financial rules and the closing of regulatory loopholes in both China and the US have already put over $2 trillion in Chinese company assets on Wall Street at risk, with the battle for the market taking place amid the intensification of a broader China-US conflict involving trade, technology, and geopolitics.

The China Securities Regulatory Commission (CSRC), the agency responsible for overseeing the securities industry in the People’s Republic, is working on new rules that would effectively stop Chinese firms which work with large amounts of sensitive user data from issuing initial public offerings (IPOs) on the US stock market, The Wall Street Journal reports, citing sources said to be familiar with the plans.

According to the newspaper’s sources, CSRC officials have been quietly telling some Chinese companies and foreign investors that the new rules would prevent firms from listing abroad via specially-created divisions incorporated outside China. The regulations are expected to affect strategic sectors including internet companies, telecommunications firms and education sector enterprises. However, some sectors, including companies in the pharmaceutical industry, are not expected to be as greatly affected in situations where their data is "less sensitive."

The new rules are said to be part of the Chinese government broader plans, unveiled earlier this year, to prevent Chinese companies from sidestepping national restrictions on foreign investment into China by setting up what are effectively shell companies abroad which are formally separate from, but factually completely accountable to, their China-based parents.

According to officials, on top of new rules targeting companies in sensitive industries, regulators are also expected to set up a new supervisory framework under which firms looking to issue IPOs would require approval from a cross-ministry committee, with that process expected to be up and running sometime in the coming months. The committee is expected to include members of the CSRC itself, plus the Cyberspace Administration of China (the country’s internet watchdog) and other relevant ministries.

The rules for the data-heavy companies are reportedly expected to be implemented sometime in the fourth quarters of 2021, but have yet to finalised. WSJ’s sources say the CSRC has asked some Chinese companies with plans to issue IPOs abroad to hold off on doing so.

Last month, US media estimated that over $2 trillion in value from the 250+ Chinese companies listed on Wall Street may be swept away if the Variable Interest Entity (VIE) loophole – the means by which Chinese firms have been able to get around the Asian nation’s strict policy on foreign ownership, is closed. Over the past two decades, Chinese companies have carefully listed on the US stock market using VIEs, tantalised by the prospects of easy cash from American investors, who have expressed an eagerness to invest in the world’s industrial powerhouse.

Chinese authorities’ efforts to tame tech companies – particularly those working in telecoms, high tech, and media – have put the VIE system under threat. At the same time, American regulators have passed their own restrictions aimed at increasing oversight over Chinese firms, with the US Securities and Exchange Commission recently ordering PRC companies listed on Wall Street to disclose risks related to possible Chinese government interference in their business. Last year, US lawmakers passed the so-called "Holding Foreign Companies Accountable Act," which requires firms listed on US exchanges to publicly declare that they are not owned or controlled by any foreign government, and allow themselves to be audited.

The US and other Western nations and corporations have severely criticised the Xi Jinping government over its recent efforts to close tax loopholes, improve regulatory regimes and introduce ‘rule of law’ reforms aimed at eliminating corruption and optimising administration. Beijing has generally ignored these criticisms, which have rung hollow following decades of complaints by Western businesses themselves about China’s lack of regulation and rule of law in business.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Dutch government falls as far-right leader Wilders quits coalition
Harvard Urges US to Unfreeze Funds for Public Health Research
Businessman Mauled by Lion at Luxury Namibian Lodge
Researchers Consider New Destinations Beyond the U.S.
53-Year-Old Doctor Claims Biological Age of 23
Trump Struggles to Secure Trade Deals With China and Europe
Russia to Return 6,000 Corpses Under Ukraine Prisoner Swap Deal
Microsoft Lays Off Hundreds More Amid Restructuring
Harvey Weinstein’s Publicist Embraces Notoriety
Macron and Meloni Seek Unity Despite Tensions
Trump Administration Accused of Obstructing Deportation Cases
Newark Mayor Sues Over Arrest at Immigration Facility
Center-Left Candidate Projected to Win South Korean Presidency
Trump’s Tariffs Predicted to Stall Global Economic Growth
South Korea’s President-Elect Expected to Take Softer Line on Trump and North Korea
Trump’s China Strategy Remains a Geopolitical Puzzle
Ukraine Executes Long-Range Drone Strikes on Russian Airbases
Conservative Karol Nawrocki wins Poland’s presidential election
Study Identifies Potential Radicalization Risk Among Over One Million Muslims in Germany
Good news: Annalena Baerbock Elected President of the UN General Assembly
Apple Appeals EU Law Over User Data Sharing Requirements
South Africa: "First Black Bank" Collapses after Being Looted by Owners
Poland will now withdraw from the EU migration pact after pro-Trump nationalist wins Election
"That's Disgusting, Don’t Say It Again": The Trump Joke That Made the President Boil
Trump Cancels NASA Nominee Over Democratic Donations
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OnlyFans for Sale: From Lockdown Lifeline to Eight-Billion-Dollar Empire
Mayor’s Security Officer Implicated | Shocking New Details Emerge in NYC Kidnapping Case
Hegseth Warns of Potential Chinese Military Action Against Taiwan
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Jamie Dimon Warns U.S. Bond Market Faces Pressure from Rising Debt
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Taylor Swift Gains Ownership of Her First Six Albums
Bangkok Ranked World's Top City for Remote Work in 2025
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
×