China To Close Loophole Used by Tech Firms for Foreign IPOs (bloomberg.com) 20
China is planning to ban companies from going public on foreign stock markets through variable interest entities -- Bloomberg reported Wednesday, citing people familiar with the matter -- closing a loophole long used by the country's technology industry to raise capital from overseas investors. From the report: The ban, intended in part to address concerns over data security, is among changes included in a new draft of China's overseas listing rules that may be finalized as soon as this month, said the people, asking not to be identified discussing private information. Companies using the so-called VIE structure would still be allowed to pursue initial public offerings in Hong Kong, subject to regulatory approval, the people said. The China Securities Regulatory Commission said on its website Wednesday that a media report about banning the overseas listings of companies using the VIE structure is not true, without giving further details. [...] The overhaul would represent one of Beijing's biggest steps to crack down on overseas listings following the New York IPO of ride-hailing giant Didi Global, which proceeded despite regulatory concerns.
silver lining (Score:5, Insightful)
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VIEs are the way to let foreign venture capital firm to invest in Chinese companies. Most successful Chinese hi-tech companies, from early stars like Sina through mega-stars like Alibaba to the newest stars like ByteDance (*), were funded by western VCs. One of the accusations made up by US government and politicians against China is that Americans are not allowed to invest in Chinese companies. But they never mention VIEs and those western VC-backed crown jewels of China, because they don't want you to kno
Except China's securities regulator denies this. (Score:1)
https://news.yahoo.com/china-d... [yahoo.com]
"Beijing on Wednesday denied a report that it was looking to plug a loophole used by Chinese tech companies to go public on foreign stock markets.
Bloomberg News reported, citing unnamed people familiar with the matter, that China was planning to ban firms from using offshore structures known as variable interest entities (VIE), closing a gap used by tech giants such as Alibaba and Tencent in recent decades to avoid restrictions on foreign investment and listings abroad.
But t
Communists are gonna communist (Score:5, Informative)
This happened because the CCP has never stopped being communist, which is by very definition anti-capitalist. The big argument back in the day in the halls of congress is that by conferring on China permanent "Most Favored Nation" trading partner status that this would somehow magically transform China by using economics into a functioning democracy.
I submit that the exact opposite is happening. China is only using capitalist means to advance more control over whatever itches them and not less. I submit that congress needs to revisit its earlier decision and admit that it was a complete and abject failure.
And, to my so called "liberal" friends concerned with things like lgbt rights and correct pronouns. Do you think any of that would be tolerated in some future communist society?? I suggest that you look long and hard at what is tolerated in China today (hint nothing is) before you decide to follow your Marxist friends in big tech like lemmings diving into the sea. They aren't your friends.
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Lots of capitalist countries do this kind of thing, because unbridled capitalism leads to the kinds of problems that China has recently experienced. For example the collapse of a major construction company that got so large it almost caused the entire economy to experience a financial crash when it couldn't service its debt. Remember when our companies were too big to fail?
China is obviously aware of what tech companies have managed to do in the US. Lots of people around here complain about them having too
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Re: Communists are gonna communist (Score:3)
China is smart. In this sense, they seem to understand the workings of capitalist systems better than we do. The business assets are controled by their owners. Who will do what they want with them, laws and regulations be damned. If the Google, Lockhed, or AT&T boards of directors say "sell the data" in return for some yummy cash, nothing will stop them. Customer data or F-22 blueprints, it's all fair game. Sure, put some of our executives in prison. There are lots more where they came from.
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The attack on liberals is mostly unwarranted, though. Even the libs have come around to the understanding that the favorable status for China is being unwound. Almost everyone agrees with it
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I'm curious, in what way is China communist? What makes a country "communist?"
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I know. Politically, they are dictatorships. Economically, they are state capitalists. The state owns and controls everything, for the benefit of a few in the party. Communism is when the workers control the means of production. The end game of communism is not to have a state, or a currency. That's pretty far from what China or Russia are doing.
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And, to my so called "liberal" friends concerned with things like lgbt rights and correct pronouns. Do you think any of that would be tolerated in some future communist society??
it depends on the ideology of the communist rulers. You don't think lgtpq people can be communist too? if the communists have a conservative ideology such as the CCP then no. If they are liberal communists then I don't see why not. If they are theocratic communists then no.
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China worried about data "security?" (Score:2)
In a country where the CCP insists that all foreign businesses disclose their IP/Security Keys, make back-doors and provide data whenever they want it; this is laughable.
SEC and other regs that force some data to provide (Score:2)
SEC and other regs that force some data to provide? to foreigners?
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publicly held companies have disclosure laws and have filing requirements, i.e., quarterly, annual etc. and especially in China's situation requirements for disclosure if business conditions are impacted negatively by gov't requirements, disasters, market or business conditions. It's all above board to protect investor interest. You can't play in the pool unless you agree not to pee in it.
Ty CCP for being concerned about my data (Score:1)