WSJ US BusinessChina Targets Firms Listed Overseas After Launching Didi Probe

July 6, 20210
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China said it would tighten rules for companies listed overseas or seeking to sell shares abroad, moves that could hinder attempts by homegrown firms to raise money in the U.S.

The shift comes as Chinese regulators intensify scrutiny into technology companies, including Didi Global Inc., that recently listed in the U.S.

Wall Street has long been a bridge between China’s economic miracle and the U.S. Blockbuster listings of firms like Alibaba Group Holding Ltd. in New York emphasized China’s rising economic clout while letting American investors profit from their growth.

Now, China’s move toward restricting such listings highlights the diverging visions in Beijing and Washington of the future of technology, data protection and security. With a widening gulf of distrust on a range of issues, both Chinese and American companies could get caught in the middle.

Turmoil around Didi foreshadowed the latest move. The ride-hailing giant has faced a series of regulatory actions at home since its New York stock debut last week. According to people familiar with the matter, Chinese officials suggested it delay its initial public offering, partly amid concerns that the U.S. government could use audit documents that Didi was required to file as a U.S.-listed company to gain access to data on Chinese citizens.

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