The travel program on Didi’s tour shows that Beijing wants a complete overhaul | Business and Economic Affairs

For investors around the world, a saga about Didi Global Inc. has made China’s largest arms manufacturer even more dangerous as President Xi Jinping seeks to control one of the country’s most important assets: Big data.

Didi is a very good story. The company controls almost the entire passenger market in China, and account for SoftBank Group Corp. and Tencent Holdings Ltd. Didi was really profitable in the first phase, market needs. His first public offering last week was the second largest in the US by a Chinese company, and was well received. Didi sold 317 million shares – about 10% more than originally planned.

And what was announced at the end of the Communist Party’s centennial does not seem to have sparked a celebration in Beijing. Instead, two days after the IPO, China’s online regulator said it was monitoring the company for national security reasons. Two days later, the regulators said the company had seriously violated and retained and used personal information. It then ordered that the company’s program be removed from stores.

The stock accounted for 28% of sales before the sell-off on Tuesday as U.S. markets reopened.

What made Didi so valuable to investors is the same thing that puts some tech companies at risk in Beijing: It contains a lot of information from half a billion users a year, especially in China. Last year, the Xi government stepped up its efforts to protect abusers and find ways to promote economic growth instead of enriching billions of people who could oppose the Communist Party.

China’s Cyberspace administration has demanded that Didi delay its IPO weeks to monitor network security, the Wall Street Journal reported, citing people familiar with the matter. The regulator was particularly concerned that the US enrollment would require Didi to disclose its major suppliers and suppliers, which could put them at risk of security breaches, he said, citing anonymous individuals.

Didi said in a message sent by email on Monday he was unaware of the Chinese authorities’ decision to ban user registration and remove Didi Chuxing from pre-registered app stores.

Didi, like many other talented Chinese giants, grew rapidly with no supervisors. Beijing now wants to prevent wrongdoing, but it takes more time. Writing in the US, Didi avoided procedures approved by Chinese security guards at a time when the government was forcing other companies to make money at home.

“Beijing is not happy to see its players in this country just interacting with their foreign partners,” said Xiaomeng Lu, a senior researcher at Eurasia Group, a political analyst. “It also wants modern companies to preserve their assets – data and technology – in China.”

Some of the indications are that China will have a third of the world’s knowledge by 2025, giving it a chance to compete instead as an innovator that can drive the modern economy. And the political costs are also high: Biden officials are reviewing what users should be banned in China, and Beijing is also involved in providing information that its enemies can use.

China’s efforts to launch a multimillion-dollar air-conditioning system intensified late last year as the country recovered from the effects of the COVID-19 epidemic and the growing tensions in the US. Officials set up a highway in the intech sections where they drew $ 35bn from Ant Group Co in Shanghai and Hong Kong at 11 p.m.

Like Didi, Ant controlled their role. In just a decade, the company, which is affiliated with Jack Ma’s Alibaba Group, has grown to change the lives of millions of Chinese through the Alipay program and the Yu’ebao market capitalization.

By March, it was clear that the authorities were intensifying the persecution. President Xi, at a meeting of the Communist Economic Advisory Committee, warned that Beijing would pursue so-called “platform” companies that have achieved more and more power in the market. The term applies to a wide range of companies offering hundreds of millions of services, from Didi to senior Meituan executives and deep e-commerce executives like JD.com Inc.

This struggle has been extremely burdensome professionally. Alibaba’s Hong Kong sales have dropped 33% since October, while Tencent (China’s leading director of television, sports and music publishing) has dropped by 28% since writing in January. Didi fell nearly 11% on Friday.

China is not alone in trying to control the management of large corporations. US Congress wants to pressure companies like Amazon.com Inc. and Apple Inc. to radically change their businesses, while Google is being monitored by European Union research on its advertising computer.

“We have entered a new era in the world where technical monitoring has increased and will continue for some time,” said Joshua Crabb, senior manager at Robeco, Hong Kong.

But the growth and speed of the Xi campaign speaks volumes about the Communist Party’s interest in reform. The party is battling what it sees as a major threat to national security and its five-year plan in October met with security issues for the first time. Fighting against the US is only growing under Biden’s supervisors, who recently urged allies to form a strong alliance against Beijing.

The problem is that Chinese traders often go to the US stock exchange, which gives startups something they can’t find at home. The deep pool of global currency and constraints to curb means that the world’s largest market is still a key factor for Chinese and Hong Kong companies, which earn more revenue earlier in the year. The forced withdrawal by the New York Stock Exchange is a significant factor in the Nasdaq that has not stopped Chinese companies from running out of money.

While the Communist Party does not say anything about the US approach to its companies, it is often able to run good governance. But the lure of business – as in the case of Didi – is very bold and puts the government on the US stock market.

China’s online supervisor is “trying to get in the way of the project,” said Chucheng Feng, a co-founder of the Plenum alliance, a research and development company that specializes in Chinese politics and economics. “They are trying to use Didi to create this model of how the company will be registered in New York.”