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China is targeting more technology groups after the repression of Didi

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Beijing has extended the crackdown on technology platforms, targeting more listed companies in the United States after ordering the removal of Didi Chuxing group from shopping in Chinese app stores in a move that sent technology stocks to a halt.

The China Cyber ​​Administration announced Monday that it was investigating Chief Zhipin, an online recruitment company, and Chinese applications Yunmanman and Huochebang, which joined in 2017 to form Full Truck Alliance. Platforms are not allowed to register new users while they are being investigated.

The CAC announcement cited suspected violations of national security and cybersecurity laws, without providing details.

Regulatory crackdown sent tremors through Asian markets on Monday. The Japanese group SoftBank, of which Vision Fund is a large Didi investor, fell 5.4 percent, while internet groups Alibaba and Tencent fell 2.9 percent and 3.7 percent, respectively, in Hong Kong.

Didi’s actions have fallen 5.3 percent on Friday, two days after the company listed on the New York Stock Exchange, having resurrected $ 4.4 billion in the largest list by a Chinese company in the United States since Alibaba in 2014.

The crackdown by China’s cyber regulator on Didi and others has marked a new offensive for the country’s technology companies, citing previously unused cyber security regulations. China’s financial and competition guard dogs have already inside companies including Ant Group and Alibaba, two pillars of the billionaire Jack Ma’s internet empire, and the Meituan trade group.

Like Didi, Full Truck Alliance and Boss Zhipin listed in New York in June, grossing $ 1.6 billion and $ 912 million, respectively.

The three technology groups are industry leaders in China, and they are all supported by Tencent, China’s most valuable technology group, which has avoid the peg of regulatory repression.

The CAC said the probes were conducted as part of new cyberspace proceedings put in place on June 1 that strengthened surveillance of companies operating critical information technology infrastructures that could affect national security.

“[Chinese] Statements from regulators in recent months make it clear that companies ’primary responsibility is to ensure data security before going abroad,” said Kendra Schaefer, technology analyst at Trivium, a consultancy based on Beijing. “The message is: companies are welcome to overseas IPOs, as long as their domestic home is in first order.”

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

Sunday, the CAC he ordered Didi to be fired from Chinese app stores. The company replied that it would “implement with determination” the demands of the authorities.

The latest crackdown came when 34 Chinese companies hit a record $ 12.4 billion in New York in the first half of 2021. However, more than two-thirds of Chinese groups have fallen below their initial public offering price.

U.S. regulators have intensified scrutiny of Chinese companies listed in the country later Luckin Coffee it has fabricated hundreds of millions of dollars in sales in a scandal that has fueled long-standing fears about control standards and transparency.

Under a law passed in December, Chinese companies will trade on U.S. exchanges face the threat of clutter unless they allow U.S. authorities access to control accounts, which is prohibited by Beijing.

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