The Chinese government is not stopping its war on the Chinese technology giants. This is a war for the future of China and the administration wants to show that it is still the “boss”. The administration is demanding that the travel-sharing company Didi be deleted from the Wall Street trade. The Chinese regulator claims that there is a concern about information security and the leakage of sensitive information.
It’s not clear why listing on Wall Street causes the regulator to disseminate information alibi, maybe it’s information flowing to investors through conventional channels, information that the regulator does not want to be exposed and maybe it’s just a way to restrict and beat Chinese companies.
Didi’s troubles with the administration began immediately after its issuance about six months ago when, against the background of these frictions, the company’s share fell by 505 to a price of about $ 8, which expresses a value of about $ 40 billion.
What can Didi do? Cancel registration on Wall Street and register in Hong Kong. Back in private hands or fighting against the regulator, but this could be a long war that would cost a lot of money.
Recall that just before the IPO, the Chinese regulator tried to stop the IPO. The company insisted and later the regulator opened an investigation regarding the collection and use of personal information by the company. The regulator’s claim that the information was collected illegally, and it ordered app stores to remove 25 apps run by Didi.
Didi’s management announced that changes would be made for the company to comply with national security laws and the use of personal information and the company has refrained from registering new users in China. Recall that the company has extensive activity throughout the world. But as mentioned it did not help.
Not only did Didi attack the Sunni regulator – Alibaba, Tsent and others also feel the pressure of the administration to narrow their steps, which is reflected in restrictions related to the marketing and distribution of content, games, screen time of young people, along with more significant taxation.
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