China allows Didi to resume signing up new users as tech crackdown eases | CNN Business

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CNN
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It said on Monday that public transport giant Didi received approval to resume registering new users in China, providing further evidence that Beijing’s regulatory crackdown on tech giants may be coming to an end.

The move is the latest sign that regulators are loosening the reins on the country’s beleaguered tech companies in an attempt to spur economic growth.

“For more than a year, our company has cooperated with the government’s cybersecurity review, seriously addressed the security issues found in the review, and carried out comprehensive rectification,” Didi said in a statement published on his Weibo account.

With approval from the Office of Cybersecurity Review, Didi will be able to resume adding new users “immediately,” he added.

Didi is a poster boy for Beijing’s years-long crackdown on its tech companies. Just days after its $4.4 billion IPO on Wall Street in June 2021, regulators banned Didi from app stores in mainland China and launched an investigation into its handling of customer data.

They accused Didi of violating privacy laws and posing cybersecurity risks. His actions were also widely seen as punishment for the company’s decision to go public overseas rather than in China.

The regulatory actions wiped tens of billions of dollars off Didi’s market capitalization and hurt its domestic business. Under pressure from Beijing, Didi announced in late 2021 that it would begin the process of delisting from the New York stock exchange and spin off in Hong Kong.

Last July, China’s cyber regulator fined Didi just over 8 billion yuan ($1.2 billion) for violating data and cybersecurity laws.

The lifting of the ban on new users comes after Beijing signaled a softening of its stance on the country’s technology industry. Earlier this month, a senior official said the government’s crackdown on the fintech operations of more than a dozen internet companies was “basically” over.

The remark came on the same day that Chinese billionaire Jack Ma relinquished control of Ant Group after the fintech giant’s shareholders agreed to restructure its business.

China’s crackdown on its biggest tech companies began in 2020 with new fintech regulations, forcing Ma’s Ant Group to shelve its $37 billion IPO days before its launch. Regulators then targeted a number of other tech giants, including Tencent, Meituan and Didi.

But China’s economy is reeling from the country’s strict Covid restrictions, which ended in early December, and a historic drop in property. Policymakers have vowed to do everything possible this year to save the economy, banking on the private sector to boost growth and boost domestic demand.