China expanded its latest crackdown on the technology industry beyond Didi Global to include two other companies that recently listed in New York, dealing a blow to global investors while tightening the government’s grip on sensitive online data.
In a series of announcements that began on Friday and escalated over a holiday weekend in the US, Beijing ordered all three companies to halt new user registrations and told app stores to remove Didi’s service from their platforms. The regulatory onslaught came days after the ride-hailing giant completed one of the biggest US listings of the past decade and within weeks of debuts by the other targeted firms — Full Truck Alliance and Kanzhun.
Investors responded by dumping Chinese tech stocks in Hong Kong and sending shares of SoftBank Group, a backer of both Didi and Full Truck, to a seven-month low in Tokyo. Didi, which tumbled 5.3 per cent on Friday, could extend losses when trading resumes in the US on Tuesday.
While China watchers have been on high alert for regulatory shocks since Beijing scuttled Jack Ma’s IPO of Ant Group in November, the move against Didi and its peers adds a new dimension — cybersecurity — to a clampdown that has so far focused on fintech and antitrust issues.
Didi told Reuters on Monday it was unaware before the IPO that the Cyberspace Administration of China would launch a cybersecurity investigation or order a halt in China to new user registrations and a suspension of app downloads. It said the order that its app be removed from app stores in China could hurt revenue.
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