The ride share company Didi, who elbowed Uber out of China has now been removed from the countries app stores and warned that it violated laws about data collection.
The company has said that it would “strive to rectify any problems” and “protect users’ privacy and data security and prevent cybersecurity risks.” But the firestorm still poses some serious questions about Didi’s business, and it has acknowledged that revenue in China may take a hit.
Two other businesses that recently listed in New York — truck-hailing company Full Truck Alliance and job listing firm Kanzhun — have been singled out by Chinese regulators as targets of a probe “to prevent national data security risks.” Their stocks have fallen 11% and 12%, respectively, this week.
This phase of China’s tech crackdown is further defined by the ties these companies have to the United States. While Beijing’s anti-monopoly probes were concentrated on operations largely within China’s borders, it’s hard to ignore how much the government’s latest actions have focused on firms that sought foreign investment.
“China’s concerns over personal data are exacerbated when the data is at risk of being controlled by US interests,” said Brock Silvers, managing director at Hong Kong-based Kaiyuan Capital.
Concerns over data security in China — especially when the United States is involved — aren’t new, though they have been gaining traction in recent months.
Beijing’s tactics have already raised questions about whether too much regulation could hamper innovation. A couple of China’s most successful entrepreneurs have quit high-level positions in recent months. While they’ve cited reasons unrelated to the crackdown for stepping out of the limelight, experts have described the atmosphere in China for tech firms as “increasingly toxic.”
