China's Top Regulator Says it Will Help Tech Firms List Overseas

Beijing is ramping up support for tech companies seen as having the capacity to help China become more self-sufficient technologically.

With the Trump Administration extending curbs on exports of advanced chips used for artificial intelligence models, Beijing is seeking to support local tech firms that want to list and raise funding on foreign markets.

On Thursday, a top Chinese regulator vowed to help technology firms get more transparent, efficient and predictable treatment when listing abroad, according to Reuters.

ALSO SEE: China Threatens Legal Action Against Anyone Who Shuns Its Chips

Yan Bojin, the Chief Risk Officer at the China Securities Regulatory Commission (CSRC), made that statement at a news briefing on Thursday.

He said the CSRC would further strengthen the security of funds raised by listed companies to ensure their allocation towards the main business rather than other purposes.

The move comes as Washington steps up curbs against Chinese tech advancement, at a time of rising geopolitical tensions between China and the US.

Row over Huawei’s Ascend chips

A warning by the US Bureau of Industry and Security last week that using Huawei’s Ascend chips anywhere in the world would violate US export controls greatly angered Beijing, which said the statement undermined the trade truce negotiated in Switzerland earlier this month.

China said this week it would take legal action against any individual or organisation assisting or acting on the US warning.

But that wasn’t the only news that upset Beijing. Reuters reported that the US Commerce Department is also considering placing more Chinese chipmakers, such as ChangXin Memory (CXMT), on its export blacklist.

And the Bureau of Industry and Security is looking at adding subsidiaries of Semiconductor Manufacturing International Corporation and Yangtze Memory Technologies Co to the “Entity List”.

There has also been talk of delisting Chinese companies already listed on US exchanges.

Any of those moves would block or limit access to foreign capital at a time when the Chinese economy is struggling.

They could all be factors in why China’s top regulator has said it will make greater efforts to support high-quality, unprofitable technology firms going public.

The CSRC will also deepen reforms on Shanghai’s tech-focused STAR market and Shenzhen’s ChiNext board, and will encourage high-quality ‘red-chip firms’ from the technology sector to list their shares domestically, Reuters said.

Firms with mainland Chinese ownership ties listed on the Hong Kong Stock Exchange are colloquially known as ‘red chips’.