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China to “blacklist” tech startups seeking foreign funding, reports say

Published:

Dec 8, 2021 21:58 GMT

The measures would be taken to limit the role of shareholders from other nations in the next generation of Chinese tech companies.

China is preparing a “blacklist” that will include the country’s tech startups seeking funding from foreign companies and entities.

The objective, according to a report by The Financial Times, would be to prevent companies from attracting international capital and listing abroad and, in this way, limit the role of shareholders from other nations into the next generation of Chinese tech companies.

For decades, Chinese tech groups (including industry leaders like Alibaba and Tencent) have used a legal structure called “variable interest entities” (VIEs) to circumvent restrictions on foreign investment and raise thousands of dollars. millions of dollars from international investors.

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The new measures they would make this way difficult for technology start-ups, although they are not intended to apply to existing companies using VIEs.

According to statements by a person related to the matter, “VIE are not completely dead, but essentially they are [para propósitos futuros]”.

This source added that “in the future, foreign investors will be able to invest money in traditional industries. instead of technology“.

The list, which is being formulated by the Chinese authorities (including the Ministry of Commerce, the securities regulator and the central bank) could be published before the end of the year, the report concludes.

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HELEN HERNANDEZ

Helen Hernandez is our best writer. Helen writes about social news and celebrity gossip. She loves watching movies since childhood. Email: Helen@oicanadian.com Phone : +1 281-333-2229

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