China’s imposed cybersecurity review is result of US audit inspections of listed tech firms, analyst says

  • An opinion piece published by the China’s cyberspace watchdog argues that companies listing overseas risk having data ‘maliciously used by foreign governments’
  • Part of the concerns stem from a rule in the US that would require regulators to inspect audits of China-based companies, which could violate Chinese law

A specialist trader works at the post where the IPO of Chinese ride-hailing company Didi Global was traded on the New York Stock Exchange (NYSE). Didi was the first to be subjected to a new cybersecurity review process in China, which one analyst said was in response to US data collection in an opinion piece endorsed by the Cyberspace Administration of China. Photo: Reuters

Beijing’s mandated cybersecurity review for overseas listings aims to address a perceived danger stemming from US access to “sensitive” data from public Chinese tech firms, according to a Chinese expert whose opinions were endorsed and published by the Cyberspace Administration of China (CAC).

The published view of Hu Ying, who heads the data security department at the China Electronics Standardization Institute, a research agency under China’s Ministry of Industry and Information Technology, offers more insight into the driving force behind Beijing’s decision to require a security review before foreign initial public offerings. It also gives context to the cyberspace watchdog’s investigation into Didi Chuxing, launched just days after the ride-hailing giant’s listing on the New York Stock Exchange.

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