After the break for Independence Day, a black day is staged on Wall Street for Chinese companies listed in the United States. On the one hand, China has announced that it will tighten the rules for companies seeking to go public overseas and change the approval process for IPOs (Initial public offerings): a move that could hinder the attempts of Chinese companies to raise funds in the States. United. This caused Chinese companies listed on Wall Street to drop sharply.
On the other hand, the shares of the Chinese giant of private transport via app, Didi Global, fell by 25% (to then retrace a bit). Reason: on July 4, the Cyberspace Administration of China (Cac) suspended Didi’s app from the app stores on charges of illegally collecting users’ personal data.
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The Chinese squeeze on quotations abroad
As mentioned, China will tighten the rules for companies seeking to go public overseas and change the IPO approval process. The Chinese government, in the new guidelines released by the Xinhua agency, said that regulators must strengthen “cross-border regulatory cooperation” and change laws and regulations “on data security, cross-border data flow and other confidential information”.
The guidelines were conceived in the context of “profound changes in the economic and financial environment”, in the midst of “a growing illegality in the capital market that has made regulatory oversight more challenging”. The move, among other things, matured as Beijing regulators stepped up controls on tech companies amid antitrust violations and abuse of dominance, and data security.
The case of Didi Global
And here we come to the case of Didi Global, the Chinese answer to Uber. The company, as mentioned, ended up in the crosshairs of the Cyberspace Administration of China after the discovery of the “illegal collection of personal data”. The CAC had launched its investigations two days after the mega-listing of Didi in the NYSE, in which the IPO had raised 4.4 billion dollars and the valuation reached 70 billion. Let’s talk about last Wednesday, less than a week ago. In reality today we learn thanks to information collected by Bloomberg that the regulators had asked Didi Global – which in addition to private transport, from ride hailing at the rental, offers financial services for the purchase or lease of cars – as early as three months ago to delay his IPO in New York due to national security concerns involving his huge data baggage.