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China launches cyber probes into more US-listed firms
Didi Chuxing CEO Cheng Wei speaks at a product launch in Beijing in Nov 2020. Photo: Yilei Sun/ Reuters.

China’s internet regulator is investigating two truck-hailing apps, plus online recruiter Zhipin.com as it ramps up its tech crackdown; this has increased speculation that Beijing wants to discourage domestic firms from listing in the US

 

(AF) China’s cyberspace watchdog said on Monday it is investigating two truck-hailing apps, plus the online recruiter Zhipin.com, ramping up a crackdown on the mainland’s tech companies amid tightened regulations on data security.

The truck-hailing apps are Huochebang and Yunmanman, which recently merged with Kanzhu Ltd, the owner of Zhipin.com, to form the Full Truck Alliance (better known as Manbang), which went public in the US last month.

The announcement comes a day after the Cyberspace Administration of China (CAC) ordered a suspension of app downloads for Chinese ride-hailing giant Didi Global Inc, which went public in a US listing last week.

The three app-based businesses should halt new user registrations during the review, the CAC said in a statement, adding that the investigations are to “prevent national data security risks and safeguard national security”.

The cyberspace agency did not offer further details about the investigation into the three apps, but cited China’s national security law and cybersecurity law.

Chinese regulators have also recently tightened scrutiny of internet platform companies, including Alibaba Group and Meituan, for anti-competitive practices. 

Full Truck Alliance, often dubbed “Uber for trucks”, has over 10 million registered truck drivers and more than 5 million truck owners on its platform. 

Zhipin.com, which connects job seekers and employers, is China’s biggest online recruiter with 24.9 million monthly active users in the first quarter of 2021, Kanzhu said in its prospectus.

Two factors

Analysts say there are two factors in the latest news: one, that the cybersecurity regulator looking to demonstrate its clout, and two, there appears to be a broader push by Beijing to quietly discourage domestic companies from listing in the United States.

For example, the Tencent-backed Waterdrop reportedly faced pushback from insurance regulators, but listed anyway – it has traded poorly since, Reuters has said.

And officials put similar pressure to scrap US plans for podcast app Ximalaya. Of the 25 Chinese companies that listed in New York this year, 17 are underwater, with a median negative return of 22% according to a Breakingviews analysis using Refinitiv data.

With reporting by Reuters.

 

ALSO SEE:

Full Truck Alliance joins Didi in Chinese rush to New York IPOs

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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