Didi won’t be last IPO to pursue New York listing, but China’s cybersecurity review closes loopholes

China’s tech firms with more than 1 million users must undergo a cybersecurity review before being allowed to list on foreign exchanges

Didi Chuxing had pulled in US$4.4 billion with its New York IPO, but just two days after, its stock price was sent crashing as Beijing announced a cybersecurity review

2-MIN READ2-MIN

Didi Chuxing raised US$4.4 billion with its New York initial public offering (IPO) New York at the end of last month. Photo: Bloomberg

Zhou Xin

Zhou Xin is Tech Editor of the Post, following stints as Political Economy Editor and Deputy China Editor.

Published: 6:30pm, 12 Jul 2021Updated: 10:55pm, 12 Jul 2021

Will Beijing continue to allow initial public offerings (IPO) by Chinese technology firms in New York?

The answer to that question is being considered after China released a new draft cybersecurity proposal over the weekend, which gives an obscure office within the Cyberspace Administration of China the right to virtually veto any technology company planning to list on foreign exchanges.

But another question being asked is, will the cybersecurity review office veto all applications, or will it make it so hard that few are willing to try? The answer is probably no.

Beijing launched a cybersecurity review into Didi Chuxing two days after its US$4.4 billion listing in New York, barring it from taking on any new users, but it is not to be viewed as a sign that it will be the last Chinese tech company to pursue an overseas IPO.

In short, China’s upgrading of its cybersecurity review regulation is not aimed at burning down the whole house.

In the last quarter of a century, Beijing has created and maintained a procedure in a highly pragmatic fashion, making it possible for the marriage of American capital and Chinese technology to take place.

But the regime has its own loopholes and is constantly being upgraded. The official introduction of a data security gatekeeper could be an improvement, instead of a negation, of the regime.