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China on Tuesday evening confirmed it will increase oversight on how local tech companies operate their platforms both locally and overseas through two new sets of rules.
The first set of rules, set to be enforced on February 15, is focused on cybersecurity reviews and will require local tech companies with personal information on over 1 million users to undergo a security review before being allowed to list onto overseas stock exchanges.
Announced by the Cyberspace Administration of China (CAC), the rules did not specify whether cybersecurity reviews would be required for companies that list in Hong Kong.
As part of a cybersecurity review process, the Chinese government can urge tech companies to make organisational changes to fulfil their commitments to the cybersecurity review.
The CAC said the new listing requirement was established to address the risk of key infrastructure, data, and personal information being used maliciously by foreign actors.
The new listing requirement adds another layer of uncertainty for Chinese companies looking to expand overseas, as Chinese companies like China Telecom have already received the stock exchange boot from the US. The US Securities and Exchange Commission last month also gained powers to ban foreign companies