Chinese Tech Companies will Not to Listed on US Stock Exchanges

The Chinese government does not want the shares of companies that have massive consumer sensitive data to be listed on the US stock market.
Chinese Tech Companies will Not to Listed on US Stock Exchanges
Image Credit: ANI news

The Chinese government does not want the shares of companies that have massive consumer sensitive data to be listed on the US stock market. Informed sources said that it is contemplating to make new rules for this, which may dent the plans of listing of big tech companies abroad.

Internet companies with heavy user data may be banned

Officials from China's stock market regulator have spoken to some companies and international investors in recent weeks. They had said that internet companies that will have massive user data, their listing in foreign markets will be barred in the new rule. The government wants to crack down on those companies with these rules, who want to be listed outside through companies formed abroad.

Pharma companies may get permission to list abroad

Officials of the China Securities Regulatory Commission also said that companies with less sensitive data may be allowed to list abroad. Sources said that the companies that can get permission from the regulator to list abroad may be from industries like pharmaceuticals.

Image Credit: ANI news
Image Credit: ANI news

Government considers tech and education sector sensitive

The new rule will help China exert more control over the complex corporate structures of big tech companies. Those companies have done this to avoid restrictions on foreign investment in the country. The Chinese government considers sectors such as the Internet, telecommunications and education to be sensitive due to political and national security concerns.

Thieves of 'Variable Interest Entity' try to close the door

Several Chinese tech giants, including Alibaba Group Holding, DiDi Global Inc and Tencent Holdings, have built a complex corporate structure to attract foreign investment and list overseas. These variables are called interest entities. In this, the investors do not have a direct stake, nor do they have voting rights, they get some percentage of the profit.

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