London Daily

Focus on the big picture.
Wednesday, Oct 01, 2025

China Reportedly Planning to Ban User Data-heavy Tech Giants From Being Listed on Wall Street

China Reportedly Planning to Ban User Data-heavy Tech Giants From Being Listed on Wall Street

New financial rules and the closing of regulatory loopholes in both China and the US have already put over $2 trillion in Chinese company assets on Wall Street at risk, with the battle for the market taking place amid the intensification of a broader China-US conflict involving trade, technology, and geopolitics.

The China Securities Regulatory Commission (CSRC), the agency responsible for overseeing the securities industry in the People’s Republic, is working on new rules that would effectively stop Chinese firms which work with large amounts of sensitive user data from issuing initial public offerings (IPOs) on the US stock market, The Wall Street Journal reports, citing sources said to be familiar with the plans.

According to the newspaper’s sources, CSRC officials have been quietly telling some Chinese companies and foreign investors that the new rules would prevent firms from listing abroad via specially-created divisions incorporated outside China. The regulations are expected to affect strategic sectors including internet companies, telecommunications firms and education sector enterprises. However, some sectors, including companies in the pharmaceutical industry, are not expected to be as greatly affected in situations where their data is "less sensitive."

The new rules are said to be part of the Chinese government broader plans, unveiled earlier this year, to prevent Chinese companies from sidestepping national restrictions on foreign investment into China by setting up what are effectively shell companies abroad which are formally separate from, but factually completely accountable to, their China-based parents.

According to officials, on top of new rules targeting companies in sensitive industries, regulators are also expected to set up a new supervisory framework under which firms looking to issue IPOs would require approval from a cross-ministry committee, with that process expected to be up and running sometime in the coming months. The committee is expected to include members of the CSRC itself, plus the Cyberspace Administration of China (the country’s internet watchdog) and other relevant ministries.

The rules for the data-heavy companies are reportedly expected to be implemented sometime in the fourth quarters of 2021, but have yet to finalised. WSJ’s sources say the CSRC has asked some Chinese companies with plans to issue IPOs abroad to hold off on doing so.

Last month, US media estimated that over $2 trillion in value from the 250+ Chinese companies listed on Wall Street may be swept away if the Variable Interest Entity (VIE) loophole – the means by which Chinese firms have been able to get around the Asian nation’s strict policy on foreign ownership, is closed. Over the past two decades, Chinese companies have carefully listed on the US stock market using VIEs, tantalised by the prospects of easy cash from American investors, who have expressed an eagerness to invest in the world’s industrial powerhouse.

Chinese authorities’ efforts to tame tech companies – particularly those working in telecoms, high tech, and media – have put the VIE system under threat. At the same time, American regulators have passed their own restrictions aimed at increasing oversight over Chinese firms, with the US Securities and Exchange Commission recently ordering PRC companies listed on Wall Street to disclose risks related to possible Chinese government interference in their business. Last year, US lawmakers passed the so-called "Holding Foreign Companies Accountable Act," which requires firms listed on US exchanges to publicly declare that they are not owned or controlled by any foreign government, and allow themselves to be audited.

The US and other Western nations and corporations have severely criticised the Xi Jinping government over its recent efforts to close tax loopholes, improve regulatory regimes and introduce ‘rule of law’ reforms aimed at eliminating corruption and optimising administration. Beijing has generally ignored these criticisms, which have rung hollow following decades of complaints by Western businesses themselves about China’s lack of regulation and rule of law in business.

Newsletter

Related Articles

0:00
0:00
Close
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
U.S. Prosecutors Move to Break Up Google’s Advertising Monopoly
Nvidia Pledges Up to $100 Billion Investment in OpenAI to Power Massive AI Data Center Build-Out
U.S. Signals ‘Large and Forceful’ Support for Argentina Amid Market Turmoil
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
Vietnam Faces Up to $25 Billion Export Loss as U.S. Tariffs Bite
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Indonesia Court Upholds Military Law Amid Concerns Over Expanded Civilian Role
Larry Ellison, Michael Dell and Rupert Murdoch Join Trump-Backed Bid to Take Over TikTok
Trump and Musk Reunite Publicly for First Time Since Fallout at Kirk Memorial
Vietnam Closes 86 Million Untouched Bank Accounts Over Biometric ID Rules
×