China
Making Chinese IPOs a bit more private
Author: Juan Du, University of Sydney
The responses of Chinese regulators to initial public offerings (IPOs) by the country’s homegrown tech companies have made headlines beyond financial markets. With memories of the paused IPO and anti-trust investigations into Jack Ma’s Ant Group still fresh, regulators launched a series of investigations into Didi Global, China’s biggest ride-hailing company, within days of its IPO in New York on 30 June 2021.
Some media reports about the regulatory actions are skewed towards speculation about the Chinese Communist Party’s tightened grip over the tech giants. But based on public information, the accumulation of user data is a common theme in the investigations into Ant Group and Didi Global.
Like oil giants last century, big tech companies are facing growing challenges from states over their monopoly on user data. Super platforms act as basic infrastructure for the digital economy, enabling everything from the production to the distribution and consumption of digital services. Empowered by data, these platforms offer innovative solutions to digitalising traditional sectors. But they also enjoy higher pricing and bargaining power, hampering market competition, innovation and consumer interests.
In April 2021, Alibaba took a hefty penalty from Chinese regulators in the wake of anti-trust investigations. According to regulators, the company controlled over half of China’s online retail between 2015 and 2019. Since 2015, Alibaba has required merchants to choose between its platform and competitors’, using data and algorithms to implement this ‘pick one from two’ strategy — a violation of Chinese anti-trust law.
Alibaba was also accused of other data-related monopolistic behaviour. Its data-driven solutions, such as tailored search results for customers, make it difficult for merchants to switch platforms without losing their customer base, transaction records and review histories.
National security is also a concern when examining firm behaviour in cross-border exchanges of data. The probe into Didi Global was grounded in China’s National Security and Cybersecurity Laws, under which IPO-related cross-border activities require critical infrastructure operators to first seek evaluation from ad hoc Chinese regulators to pre-empt national security risks.
Two more companies came under scrutiny on the same grounds. Both control the personal data of millions of Chinese users and were recently listed in the US stock market. One of the companies, like Didi, manages large amounts of data on user identification and contact information, flow of vehicles and people and China’s transportation infrastructure.
Chinese regulators made revisions to the Cybersecurity Review Measures days after investigations into Didi. These made it compulsory for operators handling the data of over one million users to register with the cyberspace regulator for safety-related reviews before listing overseas. The cyber security examination will be undertaken by 14 Chinese regulators, and the securities regulator is the latest addition to this mechanism. The revisions referred to the Data Security Law, which will come into effect in September 2021.
The revisions are a typical case of policymaking lagging behind developments in industry. But when it comes to national security, countries often decide that it is better safe than sorry, as evidenced by the escalating screening of foreign investment in critical infrastructure by the United States, Japan, Australia and the European Union.
Didi’s treatment sent a ripple through the tech industry. Some tech companies like Meicai chose to delay their planned overseas IPOs to adjust to the new compliance requirements. Venture capitalists may have second thoughts over regulatory risks when investing in Chinese tech start-ups and see it as a hurdle for cashing in on their initial investments through IPOs. Chinese tech companies may be less favoured after foreign investors were spooked by the consecutive drops of Didi’s share price. Some firms may choose to instead list on the Hong Kong stock exchange.
Despite the chaos, there are some positives. The regulations restrain tech companies from illegal collection and use of data. Since 1 May 2021, companies have been prohibited from collecting data without consent beyond defined basic personal information. Big firms are more careful about monopolistic practices. The rival Chinese super platforms, WeChat and Alipay, are reported to be considering opening their ecosystems to each other and ending some…
China
China and India Foster Trust on the Road to Reconciliation
On October 23, 2024, Xi Jinping and Narendra Modi endorsed troop withdrawals along their disputed border, signaling a shift toward normalcy in China-India relations influenced by economic pressures and pragmatic leadership.
Recent Diplomatic Progress
On 23 October 2024, Chinese President Xi Jinping and Indian Prime Minister Narendra Modi met on the sidelines of the BRICS conference in Kazan, Russia. This marked their first delegate-level meeting in five years, during which they reaffirmed an agreement to disengage their militaries along the disputed border. Within a week, both nations initiated troop withdrawals, effectively restoring the status quo to its pre-2020 conditions.
Historical Context of Tensions
The border dispute between China and India, which dates back to colonial times, has led to significant hostilities, including a war in 1962. Both countries have maintained distinct perspectives on the boundary, prompting occasional escalations. Recent tensions have largely arisen from the rise of nationalist leaders and the shifting landscape of international politics, which have intensified the rivalry between the two nations.
Implications for Global Relations
The Xi–Modi meeting drew international attention due to its potential impact on regional dynamics. While some analysts view the disengagement as a positive step for bilateral relations, others suggest it is merely a tactical pause rather than a strategic shift. The outcome of this development remains critical to understanding the interplay between China, India, and the broader global geopolitical landscape.
Source : China and India rebuild trust on the path to reconciliation
Business
Nigeria and China Revive Currency Swap Agreement – Guardian Nigeria
Nigeria and China have renewed their currency swap deal, enhancing economic cooperation and facilitating trade between the two nations, as reported by Guardian Nigeria.
Currency Swap Deal Renewed
Nigeria and China have officially renewed their currency swap agreement, which is vital for strengthening economic ties between the two nations. This deal is designed to enhance trade relations, making transactions more efficient and less vulnerable to fluctuations in foreign exchange markets.
Benefits for Both Nations
The renewed agreement allows both countries to conduct trade using their local currencies, thereby reducing dependence on the U.S. dollar. This initiative is expected to foster economic stability and boost bilateral trade, benefiting businesses on both sides significantly.
Future Prospects
As the agreement takes effect, it is anticipated that Nigeria will experience easier access to Chinese goods and investments. This partnership not only promises immediate economic advantages but also signals a long-term commitment to closer collaboration between Nigeria and China, paving the way for future developments in trade and infrastructure.
Source : Nigeria, China renew currency swap deal – Guardian Nigeria
China
China Restarts Live Rock Lobster Imports from Australia
Australian red meat and live rock lobster exports to China resumed, improving bilateral trade relations after political tensions since 2020. This development aligns with a timetable set by leaders Albanese and Li, enhancing economic ties and benefiting both nations ahead of Lunar New Year.
This announcement comes just two weeks after the resumption of Australian red meat exports to China on December 4, 2024, signaling a broader thaw in bilateral trade relations. The restoration of both live rock lobster and red meat exports follows a timetable set by Australian Prime Minister Anthony Albanese and Chinese Premier Li Qiang on October 10, 2024. During a meeting at the ASEAN Summit in Vientiane, Laos, the two leaders agreed to restore the full live rock lobster trade by the end of 2024. The timing of the resumption will allow Chinese consumers to enjoy Australian lobster just in time for the Lunar New Year celebrations, a development that Australian Trade and Tourism Minister Don Farrell described as an “excellent result” for both the Australian lobster industry and Chinese consumers.
The resumption of lobster exports is not only an economic boon but also an important step in stabilizing the broader relationship between China and Australia. China is Australia’s largest trading partner, and the resumption of trade in high-value products like lobster helps to reinforce the importance of a constructive economic relationship for both countries.
In addition to the lobster trade, Australian exports to China have been gradually recovering since the political tensions of 2020. Prior to the imposition of trade barriers, China was Australia’s largest export market for a wide range of goods, including agricultural products, resources, and services. In 2023, China imported approximately US$155.6 billion worth of Australian goods, up slightly from the previous year. Overall, China remains a critical partner for Australia, accounting for over a third of Australia’s total goods exports, with US$204 billion worth of goods traded in 2023 alone.
According to Australian Minister for Agriculture, Fisheries, and Forestry Julie Collins, the resumption of lobster exports is particularly symbolic as it marks the final removal of trade barriers that have plagued the bilateral trade relationship since 2020.
Australia’s trade with China has faced turbulence in recent years, particularly during the tenure of former Prime Minister Scott Morrison. In 2020, Australia’s decision to align closely with the United States and sign the AUKUS security pact led to a sharp deterioration in relations with China, with Australia suffering trade restrictions on a range of products, including barley, wine, lobster, and beef. These disruptions affected an estimated A$20 billion worth of Australian exports.
Despite these challenges, the broader trade relationship has remained a cornerstone of Australia’s economic strategy. China has been Australia’s largest trading partner for over 15 years, and in 2023, China was the largest importer of Australian agricultural products, resources, and services. The Australia-China Free Trade Agreement (ChAFTA), which came into force in December 2015, played a crucial role in securing preferential access to the Chinese market, particularly for agricultural products. ChAFTA has also allowed Australia to maintain a competitive edge over other major agricultural exporters like the United States, Canada, and the European Union.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
Read the rest of the original article.
- China and India Foster Trust on the Road to Reconciliation
- Nigeria and China Revive Currency Swap Agreement – Guardian Nigeria
- China Restarts Live Rock Lobster Imports from Australia
- New modelling shows how Trump’s trade tariffs will hurt – and help – New Zealand
- China Provides Clarification on the Implementation of Article 88 (1) of the New Company Law
- China Unveils Draft Catalogue to Promote Foreign Investment
