Such rules would intensify the oversight of China’s increasingly vocal regulators, who have imposed formerly freewheeling internet giants over the past year in areas ranging from dealmaking to its handling of user data.
China’s cyberspace regulator on Wednesday declined to release a document with new guidelines for the country’s big internet companies that would require approval for new investments and fundraising.
The denial came after a document detailing such guidelines appeared on Chinese social media.
“China’s Cyberspace Administration (CAC) has not released this document and the information is false,” he said without elaborating on his official WeChat account.
It was not immediately clear whether the denial referred only to the document’s existence or its plans for further regulation.
Earlier on Wednesday, Reuters The regulator has drafted new rules, citing people familiar with the matter, that would allow it to invest in any platform company with more than 100 million users, or more than 10 billion yuan ($1.58 billion). Or give your opinion on the fundraising plan. Revenue.
The regulator did not respond to a request for comment on the reporting and could not immediately be contacted for further comment regarding its denial.
People familiar with the matter told Reuters that some Internet companies had already been informed of the plans, but that the draft rules were still subject to change.
He also said that firms included in the sectors named in the negative list issued by China’s National Development and Reform Commission (NDRC) last year will also need to apply for approval.
The sources declined to be identified as the information was not yet public.
Such rules would intensify the oversight of China’s increasingly vocal regulators, who over the past year have imposed on the freewheeling internet giants in areas ranging from dealmaking to handling of user data.
Chen Weiheng, partner and head of US law firm Wilson Sonsini’s Greater China Practice, said the Reuters report, if confirmed, could significantly impact investments in the region and “even That may be the end of the era for large Internet platform operators to build an ecosystem through investments.”
Chinese tech giants such as Alibaba Group, Tencent Holdings, Meituan and ByteDance have grown over the years by acquiring or investing in smaller players, practices that Chinese regulators now criticize as monopolistic and unfair to their users.
Some of these firms have been subjected to several penalties over the past year, including fines for not reporting past deals and monopolistic behavior. Starting February 15, China will require companies with data on more than one million users to undergo a security review before listing their shares overseas.
Tencent was Asia’s third most active investor in the fourth quarter with investments in 39 companies, behind Sequoia Capital China and Hillhouse Capital Group, according to data from CBINights. Xiaomi invested in 31 companies in the fourth quarter
Data shows that China’s venture funding grew 52% to $90.1 billion in 2021.
If such regulations are ratified, reining in the big players could give smaller, independent start-ups more room to survive and thrive, a private equity investor said on condition of anonymity.
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