After Didi’s suppression, China targets more technology groups

After ordering the removal of ride-sharing group Didi Chuxing from the Chinese app store, Beijing stepped up its crackdown on technology platforms, targeting more companies listed in the United States, which led to a plunge in technology stocks.

The Cyberspace Administration of China announced on Monday that it is investigating the direct recruitment of online recruitment company Boss and the Chinese truck app Yunmanman and Truck Gang that merged to form Full Truck Alliance in 2017. The platform is not allowed to register new users during the investigation.

CAC’s announcement mentions suspected violations of China’s national security and cybersecurity laws, but did not provide details.

The regulatory crackdown caused shocks in Asian markets on Monday. Japan’s SoftBank Group, whose Vision Fund is a large investor in Didi, fell 5%, while Internet conglomerates Alibaba and Tencent fell 2.4% and 3.9% respectively in Hong Kong.

Didi shares fall Two days after the company’s listing on the New York Stock Exchange, it rose 5.3% on Friday. improve Since Alibaba in 2014, the largest listing of Chinese companies in the United States has reached 4.4 billion U.S. dollars.

The Chinese cybersecurity regulator’s crackdown on Didi and other companies marked a new offensive for the country’s technology companies, citing previously unused cybersecurity regulations.China’s financial and competition regulators have Already under control Including the two pillars of billionaires, Ant Group and Alibaba Jack Ma’s Internet Empire, And the e-commerce group Meituan.

Like Didi, All Car Alliance and Bosi Zhipin went public in New York in June, raising US$1.6 billion and US$912 million, respectively.

These three major technology groups are the industry leaders in China, and they are all supported by Tencent, the technology group with the highest market value in China, which owns Avoid the worst Regulatory crackdown.

CAC stated that these investigations were conducted in accordance with new cyberspace procedures promulgated on June 1, which strengthened oversight of companies operating critical information technology infrastructure that may be involved in national security.

“[Chinese] Regulatory agencies’ statements in recent months have clearly stated that the primary responsibility of companies is to ensure data security before going abroad,” said Kendra Schaefer, a technical analyst at Trivium, a Beijing consulting firm. It can be listed overseas. “

The crackdown began on Friday, when CAC announced that it was investigating Didi and told the company to stop registering new users and drivers for its apps.

Sunday, CAC Order to delete Didi From the Chinese App Store. The company responded that it would “resolutely implement” the requirements of the relevant departments.

The latest crackdown came when 34 Chinese companies listed in New York in the first half of 2021 and raised a record 12.4 billion U.S. dollars. More than two thirds The Chinese group has fallen below its initial public offering price.

U.S. regulators strengthened scrutiny of Chinese companies listed in the U.S. Luckin Coffee A scandal generated hundreds of millions of dollars in sales, which has triggered long-standing concerns about audit standards and transparency.

According to a law passed in December last year, Chinese companies trade on U.S. exchanges Faced with the threat of delisting Unless they allow U.S. authorities to access audit accounts banned by Beijing.

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