On July 10, the Cyberspace Administration of China dropped a bomb on the country’s technology sector.
The country’s powerful internet regulator proposed changes to the country’s year-old cybersecurity review measures that would require companies to be listed in the US to pass a national security clearance first.
The draft proposal appears to be a way of ensuring that Chinese companies cannot go public overseas as requested by their overseas investors without first addressing national security concerns about how they handle user data. According to the Wall Street Journal, ridesharing Didi has been asked by Chinese authorities to stop listing until it completes network security reviews, but still with its IPO on July 30. The regulator launched a cybersecurity review of Didi on July 2 and released it a week later the new draft rules.
Didi’s national security investigation came from the Cybersecurity Review Office, a fairly new department set up under the new cybersecurity rules. It is…