User on a Chinese social media site in Beijing:
Chinese authorities are trying to get the country's tech companies under more control
Photo: AFP
In view of the strong growth of the Chinese tech industry in recent years, it is becoming increasingly clear to those in power in Beijing that the corporations have ever larger amounts of data from their users - and that it can make sense to regulate the handling of this data more closely and control.
Against this background, there are apparently new measures that the Chinese government is planning with regard to the country's technology companies.
According to a press report, Beijing is preparing to ban IPOs in the US for Chinese companies that have large amounts of sensitive consumer data.
The "Wall Street Journal" wrote on Friday, citing people familiar with the matter.
According to the report, tech companies in particular are likely to be affected.
Such a step had already become apparent recently. In July, for example, the Chinese government announced significantly tighter controls on Chinese companies traded on the stock exchange abroad: According to a State Council document, the new rules are aimed at "data security, cross-border data flow and the management of confidential information". In addition, it was said at the time that future IPOs would have to be specially approved.
The background to this is the government's concern that Chinese companies traded abroad could be forced by the local authorities to make their growing amounts of data available. China's securities regulator also wants to close previous regulatory loopholes that Chinese tech giants have used to enter the US or Hong Kong stock exchanges via investment companies in tax havens such as the Cayman Islands or the British Virgin Islands, as the Bloomberg news agency recently reported .
Beijing is also keeping an eye on the security of user data and how it is handled when it comes to another approach: Also on Friday, the authorities in charge of the People's Republic issued new guidelines for algorithms that Internet companies use to make suggestions to their users.
The new rules are part of the effort to strengthen privacy and data protection for users, said the country's Internet regulator.
According to the guidelines, internet companies must adhere to basic ethical rules and observe the principles of fairness.
No software should be used that induces users to spend large sums of money or to spend money on purposes that could disrupt public order.
The move is related to a series of interventions recently made by China's authorities against the country's tech and internet sectors.
This involves various sensitive issues, from the monopoly behavior of corporations to how they handle user data and the privacy of their customers.
Algorithms that track user behavior and develop suggestions based on them, for example for product purchases, are common in the tech industry and are used by many companies.
The US group Amazon, for example, is known for this approach.
In China, e-commerce companies such as Alibaba in particular, but also the transport service provider Didi and the social media platform TikTok, are likely to be affected by Beijing's actions.
cr / dpa-afx, Reuters