Reporting from Chinatown. About how China's changing this town. #AsiaIn8 #Didi #IPO @NikkeiAsia pic.twitter.com/vHYscHiQfX
Tweeting again bc this is a must read. Explains so much. China's Didi Crackdown Is All About Controlling Big Data www.bloomberg.com/news/features/2021-07-08/-didi-crackdown-big-data-is-the-latest-u-s-china-battleground
"We are entering a time when the real Cold War will not be between the U.S. and China, but between governments and Big Tech." @zacharykarabell on China's crackdown on Didi and what it really means. time.com/6079121/chinas-didi-crackdown-big-tech/
Didi shares took a dive only days into their public listing following an announcement by the Chinese government that they’d be launching a cybersecurity review on the ride-hailing company. Bad timing? #IPO #China pic.twitter.com/b1kq5SdaHH
The Beijing-based ride-hailing service raised US$4.4 billion in a stock sale in the US even while its core business is in China - where it dominates 90 per cent of the market.
Some officials are privately describing Didi's move as "yang feng yin wei" - to comply publicly, but defy privately - according to a source who was briefed, speaking on condition of anonymity for describing confidential internal discussions.
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The characterisation is particularly striking, given the Communist Party's priority to focus on getting rid of "two-faced men ... who comply in public but resist secretly" from the party, according to the communique of a January 13, 2018 meeting by the Central Commission for Discipline Inspection (CCDI), the corruption-busting agency.
The New York listing, the biggest offshore fundraising this year by a China-domiciled company, also cast the Cyberspace Administration of China (CAC) in a bad light, raising questions about its competence in ensuring cybersecurity and reining in big internet service providers like Didi, according to a second source.
"The listing of Didi is an unwanted surprise for many," the source said. "Didi has clearly angered some people."
But they added that the lack of goodwill doesn't necessarily mean Didi should expect the worst.
Reactions from Chinese regulators following Didi's June 30 listing were swift and unprecedented. The CAC first ordered Didi to stop registering new users on July 2, after announcing it was commencing an official investigation, citing the National Security Law, the Cybersecurity Law and Measures for Cybersecurity Review.
Two days later on a Sunday, the CAC ordered Didi's smartphone applications - the interface through which customers hail rides, and drivers pick up a fare - to be removed from app stores. This week, Didi's mini programme was taken off the super apps of Alipay and WeChat - both operated by Didi's shareholders - the two most-used platforms among China's 900 million mobile internet users.
The crux of the controversy, which has wiped about US$23 billion off Didi's capitalisation from its July 1 high, is a misinterpretation over the clarity and forcefulness of the CAC's instruction for Didi to postpone its New York listing. Neither Didi nor the CAC has ever publicly acknowledged that such a conversation had taken place.
Didi's executives met CAC officials sometime during the second quarter in Beijing, according to a third source, where verbal discussions produced no written records. For the CAC, such sit-down discussions with the foreign media or other internet content providers constituted channels to formally deliver the regulator's instructions, with no room for defiance.
The source, who was not directly involved in the talks but attended similar ones before, said that these interviews are "basically a chat. The regulator raises their concerns and the company representative promise to look into it. And that's about it."
While Didi's US listing complied with all of China's applicable legislation, the means by which the company forced its way to New York betrayed trust and generated anger, a source said.
Technology companies "have to find a way to meet the regulatory requirements in the US and in China, but there's no solution for now and it might be the case in the foreseeable future," said Edward Tse, the founder of Gao Feng Advisory Company, adding that a new layer of compliance adds to the complexity.
The crackdown on Didi comes at a time when China's government is tightening its grip on data security. Didi, which serves nearly 25 million passengers every month in China, sits on a trove of data including maps and geographic locations, road conditions and traffic choke points that could be potentially sensitive for national security, a source said.
The US listing plans by many Chinese technology firms are grinding to a halt following the Didi debacle, said an investment industry source who declined to be named, describing the situation with the adage "a fire at the city gate is a calamity for the fish in the pond."
China's ultimate intention is not to prevent companies from listing abroad but they do want to have procedures in place to control the mechanisms by which that happens, said Kendra Schaefer, the head of tech policy research at Trivium China, a consultancy.
WeChat's operator Tencent Holding and this newspaper's owner Alibaba Group Holding are both financial backers of Didi. Tencent's president Martin Lau and Alibaba's executive chairman Daniel Zhang both sit on Didi's board as directors.
For now, investigations are ongoing at Didi. The nine-year-old company could be ordered to suspend operations and lose its dominant market position in the worst case, or be instructed to rectify its operations to continue its business in the best case, said Henry Gao, an associate professor of law at the Singapore Management University.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2021 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2021. South China Morning Post Publishers Ltd. All rights reserved.
China's cyberspace administration on Friday said it would remove 25 mobile apps operated by Didi Global Inc from app stores as the government stepped up a crackdown on the ride-hailing giant. The apps in question used data that was illegally collected by Didi and include those for its delivery service, camera device and finance services, the Cyberspace Administration of China said in a statement. Last week, just days after Didi's $4.4 billion listing on the New York Stock Exchange, the cyberspace regulator ordered app stores to remove Didi's main ride-hailing app.
The Biden administration on Friday added 14 Chinese companies and other entities to its economic blacklist over alleged human rights abuses and high-tech surveillance in Xinjiang. The Commerce Department said the companies had been "implicated in human rights violations and abuses in the implementation of China’s campaign of repression, mass detention, and high technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups in the Xinjiang Uyghur Autonomous Region." They include the China Academy of Electronics and Information Technology; Xinjiang Lianhai Chuangzhi Information Technology Co; Shenzhen Cobber Information Technology Co; Xinjiang Sailing Information Technology; Beijing Geling Shentong Information Technology; Shenzhen Hua'antai Intelligent Technology Co., Ltd.; and Chengdu Xiwu Security System Alliance Co., Ltd.
China’s government on Friday criticized new U.S. moves to reduce access to American financial markets and said it will protect Chinese companies but gave no indication of possible retaliation. The S&P Dow Jones Indices and FTSE Russell removed more Chinese companies from their indexes after President Joe Biden expanded a blacklist of companies that are off limits to American investors. A foreign ministry spokesman, Wang Wenbin, accused Washington of “abusing national power and generalizing the concept of national security to suppress Chinese enterprises for no reason.”
Levi's sees a big lift in business as consumers rebuild closets for post-pandemic lives.
A majority of people, now including a slim majority of Democrats too, believe the coronavirus most likely originated in a Wuhan laboratory rather than from nature, a new poll shows, indicating a shift in public opinion since early in the pandemic as China continues to block a truly independent and thorough inquiry into COVID-19’s origins.
China's internet watchdog, which stunned investors with an investigation into Didi Global two days after the ride-hailing giant's New York stock market debut, has come to the forefront of Beijing's sweeping efforts to rein in its tech sector and enforce tightening data security efforts. The Cyberspace Administration of China (CAC), set up in its current format in 2014 by President Xi Jinping, implements online censorship that has tightened dramatically under his tenure. Its move against Didi and two other firms that recently went public in the United States was swiftly followed by Beijing's announcement that it will clamp down on overseas-traded Chinese firms - many of them U.S.-listed tech companies - including tightening regulation of cross-border data flows and security.
Vietnam's capital Hanoi imposed movement restrictions on Thursday to try to keep at bay an expanding coronavirus outbreak, as authorities reported a record rise in cases, most of those in the southern economic hub. Hanoi suspended public transport services to and from 14 provinces impacted by the outbreak and urged people to stay home and leave only when necessary. Vietnam has since late April sought to contain an outbreak that hit industrial factories in northern provinces but is spreading faster in the south, including Ho Chi Minh City, more than 1,100 km (684 miles) from Hanoi.
China's leadership is deeply suspicious of the international financial system, and wants to ensure that the Chinese Communist Party remains the absolute power in the land, unthreatened by fast-growing corporate giants.What's new: That lesson was learned the hard way this week by Didi, but the repercussions are likely to be much larger. Already, Chinese fitness app Keep has decided to scrap its planned $500 million IPO in New York.Get market news worthy of your time with Axios Markets. Subscribe
China's government tried Thursday to quell investor fears about tighter controls on internet companies that caused share prices to plunge, saying Beijing supports their growth.
(Bloomberg) -- The European Union is set to propose all new cars sold from 2035 should have zero emissions, as part of an unprecedented plan to align its economy with more ambitious climate targets.The European Commission, the bloc’s regulatory arm, plans to require emissions from new cars and vans to fall by 65% from 2030 and drop to zero from 2035, according to an EU document seen by Bloomberg News. The tougher pollution standards will be complemented by rules that will oblige national governm
Among Facebook, Apple, Amazon, Netflix, and Alphabet is a company expected to significantly outperform its peers.
Global index publisher FTSE Russell said it will delete a further 20 Chinese companies from its indexes after user feedback on an updated U.S. executive order that bars U.S. investment in companies with alleged ties to China's military. U.S. President Joe Biden signed the order on June 3 that bans U.S. entities from investing in dozens of Chinese companies with alleged ties to defence or surveillance technology sectors, replacing an earlier order under Donald Trump. In a statement on its website, FTSE Russell said the additional Chinese companies will be deleted from its indexes on July 28.
The enterprise software company is shifting a growing portion of its database and application business to the cloud, which is pushing growth.
Chinese e-commerce giant Alibaba Group Holding Ltd (NYSE: BABA) is intensifying Amazon.com Inc (NASDAQ: AMZN) rivalry by promising fast deliveries from China to anywhere in the world, the Wall Street Journal reports. What Happened: Alibaba aims to deliver goods from China globally in 72 hours. Lower price and faster delivery play a crucial role in winning market share. Alibaba’s e-commerce products are cheaper than Amazon due to its direct access to Chinese factories and merchants. Both giants a
It’s been a bearish start to the day for the majors. Failure to move through the day’s pivot levels would leave the support levels in play.
Ransomware attacks, fueled by COVID-19 pandemic turbulence, have become a major money earner for cybercriminals, with the number of attacks rising in 2020. In the last few months alone we’ve witnessed the attack on Colonial Pipeline that forced the company to shut down its systems — and the gasoline supply — to much of the eastern seaboard, the hack on meat supplier JBS that abruptly halted its slaughterhouse operations around the world, and just this month a supply chain attack on IT vendor Kaseya that saw hundreds of downstream victims locked out of their systems. Jack Cable, a security architect at Krebs Stamos Group who previously worked for the U.S. Cybersecurity and Infrastructure Agency (CISA), is looking to solve that problem with the launch of a crowdsourced ransom payments tracking website, Ransomwhere.
Solana, Ethereum, Binance Smart Chain, Tron and Ontology are already available on the platform.
This is what happens when a malicious software attack turns a business owner's life upside down.
Morgan Stanley has joined the growing list of Accellion hack victims — more than six months after attackers first breached the vendor’s 20-year-old file-sharing product. The investment banking firm — which is no stranger to data breaches — confirmed in a letter this week that attackers stole personal information belonging to its customers by hacking into the Accellion FTA server of its third-party vendor, Guidehouse. In a letter sent to those affected, first reported by Bleeping Computer, Morgan Stanley admitted that threat actors stole an unknown number of documents containing customers' addresses and Social Security numbers.
Read full article at Yahoo Finance
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DiDi Global (NYSE:DIDI), the top ride-sharing company in China, raised $4.4 billion in its upsized initial public offering (IPO) on June 30. It sold 317 million shares at $14 each, up from its original target of 288 million shares.
Yet Didi's stock barely closed above its IPO price on the first day, then plummeted over the following week following several stunning developments. Let's see what happened to DiDi, why everyone is talking about its broken IPO, and what its failure could mean for other Chinese IPOs.
On July 2, the Cyberspace Administration of China (CAC) suspended all new user registrations for DiDi's app within China -- where it generated about 98% of its revenue last year -- as part of a "cybersecurity review." On July 4, DiDi admitted the CAC had ordered the removal of its app from all of China's mobile app stores, due to a "problem of collecting personal information in violation of relevant PRC laws and regulations."
Didi's 377 million annual active users and 13 million annual active drivers in China can still access its app if they've already downloaded it, but the new restrictions will clearly cap the company's growth. DiDi didn't offer a timeline for the app's restoration and merely warned that the government's actions "may have an adverse impact on its revenue in China."
On July 7, China's State Administration for Market Regulation (SAMR) levied additional fines against DiDi and other tech companies over "irregularities" with their previous investments and acquisitions.
Meanwhile, a regulatory filing revealed that DiDi had gifted about $3 billion in stock options to its top executives right before its IPO. Out of the 66.7 million options granted, 63.5 million vested right away -- which means they can be sold immediately after DiDi's six-month lockup period ends.
That sequence of events sparked class-action lawsuits and a fierce backlash from U.S. leaders. Florida's Sen. Marco Rubio called DiDi's filing "reckless and irresponsible" in a recent Financial Times interview, while Pennsylvania's Sen. Bob Casey told the same outlet that U.S. regulators needed to ensure that foreign companies "play by the same rules as U.S. firms."
To be fair, DiDi mentioned most of these risks in its F-1 filing. It warned that its business was "subject to numerous legal and regulatory risks that could have an adverse impact on our business and future prospects." It also warned that "new laws and regulations may be adopted from time to time to address new issues that come to the authorities' attention."
DiDi said it had been fined by China's SAMR for unapproved acquisitions, and additional antitrust actions could subject it to fines and changes to its business that could "damage" its reputation and throttle its growth. However, DiDi denied knowing anything about the CAC investigation prior to its IPO.
DiDi might have warned U.S. investors about some of the regulatory risks, but going public before it sorted those issues raises red flags. The Wall Street Journal claims the CAC had asked DiDi to postpone its IPO in New York and conduct a review of its own network security, but it didn't issue an outright order. Since it would have been costly to postpone the IPO, DiDi moved ahead with its scheduled debut.
However, some analysts have also speculated that the CAC cracked down on DiDi in retaliation for listing its shares in the U.S. instead of a Chinese exchange. Another recent report claims Chinese regulators want to completely eliminate the VIE (variable interest entity) structure that allows Chinese companies to go public in the U.S. by listing shares of a holding company in a proxy country like the Cayman Islands.
Closing that loophole could end all Chinese IPOs in the U.S. and make other U.S.-listed Chinese stocks a lot less appealing -- especially as U.S. regulators get ready to delist Chinese companies that don't comply with new auditing standards within the next three years.
Before all of this drama unfolded, I compared DiDi to Uber and concluded its stronger growth prospects and lower valuation made it a better buy. However, the events of the past week have turned that thesis upside down.
DiDi isn't doomed yet, but it definitely won't attract any buyers until its app suspension ends. Even if it restores its app, it still needs to contend with Chinese and U.S. regulators, who simply don't want American investors to own shares of Chinese tech companies. So for now, investors should simply forget about Chinese stocks and stick with other less controversial markets instead.
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