* China's cyberspace regulator denies issuing guidelines
* Sources say CAC has drafted new rules for large internet
* Big firms to need approval for investments, fundraisings
* Sources say draft rules still subject to change
* Chinese regulators have stepped up oversight of tech
HONG KONG/BEIJING, Jan 19 (Reuters) - China's cyberspace
regulator denied on Wednesday issuing a document with new
guidelines for the nation's big internet companies that would
require them to seek approval for new investments and
The denial came after a document appeared on Chinese social
media detailing such guidelines.
"The Cyberspace Administration of China (CAC) has not issued
this document and the information is false," it said on its
official WeChat account without elaborating.
It was not immediately clear whether the denial referred
just to the existence of the document or its plans for further
Earlier on Wednesday, Reuters reported, citing people
familiar with the matter, that the regulator has drafted new
rules that would give it a say over investment or fundraising
plans of any platform company with more than 100 million users,
or with more than 10 billion yuan ($1.58 billion) in revenue.
The regulator has not responded to a request for comment on
the reporting and could not be immediately reached for further
comment about its denial.
The people familiar with the matter told Reuters that some
internet companies have already been briefed on the plans, but
the draft rules were still subject to changes.
They also said firms involved in sectors named on the
negative list issued by China's National Development and Reform
Commission (NDRC) last year would also need to apply for
The sources declined to be identified as the information was
not yet public.
Such rules would intensify the oversight from China's
increasingly assertive regulators, who have over the past year
reined in formerly freewheeling internet giants in areas from
dealmaking to their handling of user data.
Chen Weiheng, partner and head of U.S. law firm Wilson
Sonsini's Greater China practice, said the Reuters report, if
confirmed, could significantly impact investment in the sector
and "even end the era for big 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 which Chinese regulators now criticise as monopolistic
and unfair to their users.
Some of these firms have over the past year been subjected
to a host of punishments, including fines for not reporting past
deals and for monopolistic behaviour. From Feb. 15, China will
also require companies with data on more than 1 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, following Sequoia
Capital China and Hillhouse Capital Group, according to data
from CBInsights. Xiaomi invested in 31 companies in the fourth
China's venture funding rose 52% to $90.1 billion in 2021,
the data showed.
A private equity investor who declined to be identified said
such rules, if confirmed, could leave more room for smaller,
independent start-ups to survive and thrive by reining in big
($1=6.3483 Chinese yuan)
(Reporting by Xie Yu in Hong Kong, Yingzhi Yang in Beijing and
Zhang Yan in Shanghai; Additional reporting by Kane Wu and
Selena Li in Hong Kong; Writing by Brenda Goh; Editing by
Jacqueline Wong, Rashmi Aich, Kim Coghill and Tomasz Janowski)