China’s Critical Data Rules Not Aimed at Firms Planning Foreign IPOs: National Network Information Office
Sheng Ronghua, deputy director of the National Network Information Office, told attendees at a press conference that China’s forthcoming rules for protecting critical information infrastructure are not aimed at firms planning overseas listings. Instead, the focus is on ensuring the security of key information infrastructure and maintaining overall network security.
“Chinese companies wanting to go public — including overseas — must comply with two main aspects of a wider set of regulations. One set includes national laws and regulations,
the other for ensuring the security of the national network, critical information infrastructure and personal data.” Sheng said.
In response to a question about whether foreign ownership made a difference, Sheng said, “The form of business ownership should not define critical infrastructure. For a long time, we have actively supported internet information companies to finance themselves and develop according to laws and regulations.”
The comments come as policy uncertainty this summer has essentially halted Chinese listings in the U.S.. In late June, Didi found itself the subject of a national security and public interest investigation by China’s cybersecurity watchdog two days after its US IPO. Hello Travel, Ximalaya and Linkdoc all canceled their plans to go public in the United States.
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“At present, the network security faced by key information infrastructure is severe and complicated. There are still some shortcomings in our work, such as scattered resources and insufficient support from the technology.” Sheng also mentioned, “We need to further clarify the responsibilities of all parties, and improve our security protection capability.”