![]() ![]() Chinese on-demand logistics firm Lalamove is considering shifting its planned US$1bil (RM4.19bil) US initial public offering to Hong Kong, Bloomberg News reported, becoming potentially one of the first firms that filed confidentially in the US to re-route to Hong Kong. Bankers say they expect the majority of Chinese IPOs bound for US exchanges to be suspended or diverted to other venues. Companies that are already public will be held accountable for keeping their data secure, the governing State Council said.Ībout 70 private firms based in Hong Kong and China that are set to go public in New York may eventually be impacted, according to data compiled by Bloomberg. The time of easy business is gone.”Īfter the government gave it expanded powers last week, the CAC will revise rules for overseas listings. For the businesses like Alibaba and Didi, their game is changing. “There needs to be a department that deals with big tech, in particular platform businesses, and takes them seriously. “It’s a necessary change,” said Mark Greeven, a professor specialising in China technology at IMD Business School based in Lausanne, Switzerland. That kind of data could be “affected, controlled and maliciously exploited by foreign governments”, the CAC said in a statement on Saturday. The agency broadened its crackdown over the weekend, redefining a rarely used rule to require that any company holding data on more than one million users must now apply for cybersecurity approval when seeking listings in other nations. The Didi inquiry, which came days after the ride-hailing giant’s US$4.4bil (RM18.48bil) US listing, set in motion a US$130bil (RM546.13bil) stock sell-off and forced high-flying startups including Alibaba Group Holding Ltd-backed LinkDoc Technology Ltd and Tencent Holdings Ltd-backed Meicai to halt their plans to go public. The CAC on July 2 launched a cybersecurity probe into Didi Global Inc, demonstrating how the once-obscure agency is flexing its muscle in ways that can upend capital markets and overhaul the country’s most successful businesses. With the US lobbying other nations to prevent China from obtaining technology like advanced computer chips and Xi undertaking a national project to develop them, stringent data security controls risk further disrupting supply chains, balkanising financial markets and forcing countries to pick sides. More broadly, the crackdown shows how technology is quickly turning into the next major battleground in a clash of superpowers, with implications that potentially could reshape the global economy for decades to come. Authorities are also considering establishing a government-backed joint venture with some of the country’s biggest e-commerce platforms to oversee the lucrative data they collect from hundreds of millions of customers, Bloomberg has reported. It wields a broad mandate to rein in the influence of the country’s largest corporations, focusing on the way they’ve employed data to shore up their dominance and thwart rivals. The agency’s prominent new role in China’s tech crackdown follows months of probes led primarily by the State Administration of Market Regulation, China’s antitrust watchdog, and financial regulators including the People’s Bank of China. The government needed to rein in “disorderly expansion of capital, and the Internet companies fall squarely under this warning”. “The CAC is now going to the front of the stage upon Xi Jinping’s calling,” said Feng Chucheng, a partner at research firm Plenum in Beijing. The watchdog – which operates under the Central Cyberspace Affairs Commission chaired by President Xi Jinping – is now at the forefront of Beijing’s attempts to wrest control over one of its most valuable resources: data, the quintessential fuel for a global struggle with the US to dominate the technologies of the future. No agency held such explicit gatekeeper powers in the past. Under new rules unveiled this month, any company that wants to go public abroad will need to seek CAC approval if they have more than one million users. Now, the low-profile agency holds the future of IPO-hungry tech firms in its hands.Īround since 2011, the CAC has burst into prominence over the past two weeks, doing what powerful financial regulators could not by extending its oversight to overseas initial public offerings, all with the backing of the governing State Council. In its earliest iteration, the Cyberspace Administration of China used to police the country’s Internet for pornography and sensitive content online. ![]()
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