China’s assault on big tech wiped billions of dollars from the worth of some of the country’s most well-known enterprises. Now, as the country’s economy continues to deteriorate, officials indicate that they may relax their oversight of the sector.
According to the Wall Street Journal, Chinese regulators may ease their hold on cab-hailing giant Didi Chuxing, enabling the business to resume taking new user registrations and re-release its primary applications on the country’s app stores as soon as this week.
China’s cyber regulators began scrutinizing the company’s cybersecurity soon after its IPO in June 2021. Beijing had increased its monitoring of Chinese businesses’ abroad listings, concerned that the enormous troves of data owned by its digital titans may constitute a national security danger.
Didi Chuxing came under investigation, with officials citing suspected breaches of regulations in gathering and utilizing personal information. Shortly after, regulators blocked Didi Chuxing from adding new users and withdrew 26 associated ride-hailing applications from app stores. Anonymous sources recently told the Wall Street Journal that officials plan to allow the mobile apps of Didi back on domestic app stores.
In addition to Didi, two other US-listed tech businesses that have been investigated — truck-hailing provider Full Track Alliance and online recruiting firm Kanzhun — could get their investigations ended and bans lifted. The three companies, though, may still face financial penalties.
The fallout from the zero-covid policy
China’s softer stance toward big tech comes as it struggles to recover from the economic damage caused by its strict zero-covid policy. Economists at institutions like the Rhodium, an independent research group, predict the Chinese economy will contract sharply due to the recurring mass lockdowns followed under this strategy, making it unlikely to meet the government’s 5.5% annual GDP growth target for 2022.