CAC, concerns about information leak… Review of supply chain, etc.
Also keep an eye on data to be submitted to U.S. securities authorities.
The IPO filed in November of last year may be canceled.
It has been reported that Chinese authorities are conducting a cybersecurity review of Xuyin, a Chinese fast fashion retailer that applied for an initial public offering (IPO) on the New York Stock Exchange.
According to CNBC and the Wall Street Journal (WSJ) on the 17th (local time), the Cyberspace Administration of China (CAC) is reviewing Xuyin’s supply chain in China. They are investigating how Xuyin handles information about employees and suppliers in China and whether it can effectively protect related information from being leaked overseas.
Most of Xuyin’s manufacturers and suppliers are known to be located in China.
Last November, Shein applied for an IPO on the New York Stock Exchange. Foreign media outlets predicted that Shein could be traded on the New York Stock Exchange starting this year.
The WSJ reported that Chinese authorities are also keeping an eye on the documents that Xuyin will submit to U.S. securities authorities. He added that this shows that the Chinese authorities’ investigation into Xu Yin’s plan to list on the New York Stock Exchange has expanded.
As the conflict between the U.S. and China worsens, it can be seen that the Chinese authorities are trying to nail Xuyin, which is planning to list on the U.S. stock market, as a truly Chinese company.
WSJ reported that in past cases, it has taken CAC several months to complete similar investigations, and that a longer review could delay Shein’s listing. He also explained that if CAC determines that there is a serious problem with Shein, the listing plan may be completely aborted.
In 2021, Chinese authorities conducted a similar security review on Didi Global, a Chinese mobility company listed on the New York Stock Exchange, and the company was delisted after about a year.
After this case, all Chinese companies must undergo security review and approval from authorities.
However, some experts believe that unlike Didi Global, Xuyin is reviewed by Chinese authorities before listing on the New York Stock Exchange, so it can prevent the stock price from collapsing and increase investor confidence.
Meanwhile, U.S. regulators are also concerned about Chinese companies doing business in the United States. This is because they are concerned about information related to American customers falling into the hands of Chinese authorities.
Therefore, Shein has been trying to win the favor of the United States.
Early last year, Xu Yin appointed Chinese-American Donald Tang, former vice chairman of US investment bank Bear Stearns, as chairman of the board. We held a series of pop-up events and sent influential figures to our Chinese factories through promotional campaigns.
Recently, it acquired a one-third stake in SPARC Group, a joint venture between fashion company Authentic Brands Group and Simon Property Group, the largest shopping mall owner in the United States.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.