SHANGHAI, China — After authorities initiated investigations into U.S.-listed tech names such as Didi Global, China announced Tuesday that it will increase supervision of foreign listings by Chinese companies, citing worries about information security. China’s State Council cabinet and the Communist Party’s General Office said in a joint opinion posted via Xinhua News Agency that authorities will crack down on unlawful behavior in the securities market. Beijing would enact legislation and norms governing cross-border data flows and sensitive information handling, they claimed. While the suggestions have not been made public, Beijing’s harsher stance is likely to have an impact on Chinese companies considering international IPOs. Increased scrutiny of international listings may deter corporations like Alibaba Group Holding from taking use of foreign markets’ larger fundraising possibilities. The move follows the launch of probes into three technology companies that listed in the United States last month, including Didi, China’s leading ride-hailing service. The Chinese Cyberspace Administration blocked app retailers from selling Didi’s app on Sunday, accusing the business of unlawful data harvesting. In 2009, China enacted restrictions requiring companies listed outside of the country to safeguard state secrets. Authorities are likely to find a need for broader restrictions as other sorts of data, such as activity and transaction records, become increasingly relevant. The Communist Party-backed Global Times raised alarm over data leaks in an editorial this week. “For companies like Didi, which have been listed on the New York Stock Exchange and have foreign companies as their largest and second-largest shareholders,” the editorial said, “China should more strictly supervise their information security to protect both personal data security and national security.”/n
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