Chinese government steps up supervision of overseas-listed firms

BEIJING — China will step up supervision of Chinese firms listed offshore, its cabinet said on Tuesday, days after Beijing launched a cybersecurity investigation into ride-hailing giant Didi Global, Inc. on the heels of its US stock market listing.

Under the new measures, China will improve regulation of cross-border data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuance, market manipulation and insider trading, China’s cabinet said in a statement.

China will also check sources of funding for securities investment and control leverage ratios, it said.

China’s shift against companies listed overseas is a significant move in a sweeping clampdown on its massive and once-freewheeling online “platform economy.”

US capital markets have been a lucrative source of funding for Chinese firms over the past decade but the risk of additional scrutiny may now deter domestic firms from listing there. —