China’s government is tightening the strings for tech companies, especially when it comes to data management, says business analyst Ben Cavender at RTHK. “I think you’re going to see companies like this that really do peddle in data come under a lot more scrutiny going forward,” he said.
Regulators have ordered the country’s biggest ride-hailing firm, Didi, to be removed from app stores and accused it of violating rules on the use of personal data.
It comes a week after Didi raised billions of dollars when its shares were listed on the New York stock exchange for the first time.
“I think there’s potentially some subtext here which is basically saying ‘if you’re going to be a big tech company’ and you want to (do an) IPO, you’d better be doing it on the mainland'”, Ben Cavender, the principal at China Market Research Group, told RTHK’s MoneyTalk programme.
Cavender said he believed the government wanted “to tighten up its access to data that’s being collected while at the same time sort of trying to codify a little bit better what kind of data practices are actually OK in China”.
He added that the government is sending a message that it wanted more control over money flows.
He said the days of China initial public offerings (IPOs) being a sure thing were over for investors, and described the development as worrisome.
Cavender also said there was increased pressure “about this idea of consumer rights and what data actually is being collected.
“So I think you’re going to see companies like this that really do peddle in data come under a lot more scrutiny going forward,” he said.
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