Cybersecurity Reviews Herald Greater Scrutiny on Overseas Listings

July 08, 2021 | BY

Vincent Chow

First high-profile cybersecurity reviews indicate that overseas-listed Chinese tech firms are prime targets for new cybersecurity regime

Summary

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  • Overseas-listed Chinese firms' cross-border data transfer and audit requirements under close scrutiny 
  • State Council announces new guidelines bolstering regulatory scrutiny on overseas listings
  • Big data companies can expect to be deemed as CII operators under new cybersecurity review regime

Beijing's cybersecurity probes into three Chinese tech companies that recently listed in the United States threaten to stem the flow of Chinese initial public offerings in the U.S. over data security concerns.

On July 2—two days after the popular ride-hailing app Didi Chuxing listed on the New York Stock Exchange in a $4.4 billion initial public offering—the new Cybersecurity Review Office at the Cyberspace Administration of China (CAC) announced that it was reviewing Didi's data collection policies, citing national security concerns. Soon after, similar reviews into two smaller Chinese tech companies—Full Truck Alliance Co. and Kanzhun Ltd.—were launched, both of which also went public in the U.S. in June.

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