China’s authorities are preparing measures to prevent local technological startups to attract foreign funding and complicate access to foreign exchanges, reports Financial Times.
The blacklist can be published in December. It will fall into the startups using the VIE structure that are related to the use of data and may pose a threat to the national security of the country.
VIE is a legal structure that does not give full participation in the capital’s capital. It is used by some PRC companies to bypass internal restrictions on foreign investment. For example, among firms with such a structure – Alibaba and Tencent. This is not the first blow to China on its own companies.
Earlier, Chinese regulators demanded from the DIDI taxi service to develop a plan for leaving the New York Stock Exchange. China wants the DIDI leadership to bring the company with an exchange due to concerns about leakage of confidential data. As a result, the company surrendered under pressure and announced care from the exchange.
In November, China demanded from technological companies wishing to go to the Hong Kong stock exchange, to check for resistance to cyberats.