The Journal, citing unnamed sources familiar with the situation, stated that Shein’s ability to adequately secure data about its China-based employees, suppliers, and partners and stop the information from escaping outside is being investigated by China’s Cyberspace Administration.

According to the article, the Chinese agency is also attempting to find out what information Shein must give US regulators to get ready for a listing in New York.

According to the Journal, CAC’s previous investigations into incidents comparable to this one took months, and the current investigation may cause delays in Shein’s US stock sale.

According to the article, Shein might have to abandon the IPO proposal entirely if Chinese cybersecurity authorities discover any significant issues with the company’s data handling.

Requests for comments were not immediately answered by Shein or CAC.

Under Chinese President Xi Jinping, the CAC has become more and more influential as his administration has tightened control over the vast amounts of data generated by the country’s tech businesses in a bid to establish China as a big data leader. Beijing has been heavily investing in data centers and other digital infrastructure in an effort to strengthen the legitimacy of the Communist Party and turn electronic information into a national economic engine.

Beijing has so prevented a number of Chinese companies from listing abroad and compelled others to leave the US capital market.

Didi Global Inc., a ride-hailing startup based in Beijing, was delisted from the US market several months after Beijing opened an investigation into the business in July 2021. According to reports, ByteDance Ltd., the parent company of TikTok, also shelved plans to go public after Chinese regulators ordered it to address data security concerns.

- Published By Team Nation Press News

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