China’s IT authority gains more influence internationally

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The “Cyberspace Administration” of the People’s Republic of China is gaining importance in the country’s gigantic administrative apparatus. According to a report by Wall Street Journal also influence the activities of Chinese companies abroad. The digital supervisory authority should monitor IPOs abroad more closely and could even prevent them.

The most recent example is the New York IPO of the Chinese driver service broker Didi Chuxing. The Cyberspace Administration of China (CAC) warned against the stock market launch because they Didis network security concerns cherished, it is said. China’s most important economic and financial regulators, however, have approved the IPO.

Since no authority explicitly stopped Didi, the IPO was carried out as planned. Shortly afterwards, however, China’s digital supervision took action against the driver service broker. Didi had to withdraw his app from Chinese app stores for data protection reasons, whereupon Didi’s share price collapsed.

According to the report, the CAC should be able to block future international stock exchange activities if it classifies them as a threat to Chinese security interests. This is also interpreted as a sign that China’s President Xi Jinping wants to control the private sector more, especially technology companies.

The government – under the leadership of the CAC – has just passed a law that gives the authorities more power over private companies. They must share their data, gathered from social networks, online commerce, and other businesses, with China’s government when asked to do so. This digital data is now practically viewed as national property that can be monitored and restricted according to the will of the state.

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This becomes a problem for Chinese companies operating abroad. US regulators are trying to gain more access to information from Chinese companies listed on American stock exchanges, but some are opposed to it. According to her, the disclosure of such test documents to US authorities would violate Chinese law. Observers expect that a number of Chinese companies could be excluded from US stock exchanges as a result.

China’s President Xi Jinping launched the CAC in 2014, two years after his inauguration. He wanted to centralize and strengthen the security of Chinese networks and data. The leadership of the Middle Kingdom was startled by Edward Snowden’s revelations about US espionage in 2013. The Chinese government recognized that information about Chinese citizens or companies could easily fall into the wrong hands if the data is not better protected.


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