China intensifies its crackdown on overseas listings and conducts pre-IPO reviews of companies with large amounts of user data Reuters

SHANGHAI (Reuters)-China’s cyberspace regulator said on Saturday that any company with more than 1 million user data must undergo a security review before listing overseas, thereby expanding its crackdown on its huge “platform economy.”

When publishing the proposed rules on its website, the State Internet Information Office of China stated that the security review will focus on the risk of data being affected, controlled or manipulated by foreign governments after it is listed overseas.

China’s cyberspace regulators are imposing stricter restrictions on data collection and data storage. The authorities have also promoted the company’s domestic listing more broadly.

Two sets of new rules covering data storage and data privacy, the Data Security Law and the Personal Information Protection Law, will take effect this year.

The announcement on Saturday will also require companies to submit IPO materials that they plan to submit for review.

The National Security Review Committee stated that the security review treats national security risks as “risks of disruption of the supply chain due to political, diplomatic, trade and other factors” and “risks of malicious use of key data by foreign governments after listing overseas”. “

The Codex Alimentarius Commission is seeking public comment on the proposed rules.

The notice was issued after Chinese authorities launched an investigation into the alleged violation of user privacy by online ride-hailing giant Didi Global Inc, just a few days after the company went public in New York.

Under investigation, Didi’s share price plummeted by 20%, and the company said its revenue would be affected.