China’s Tech Crackdown Cracks On

THE CRACKDOWN ON fast-growing technology firms continues apace.

Online recruiter Zhipin, owned by Kanzhun Ltd., (seen above) and the leading commercial vehicle hailing apps Huochebang and Yunmanman, both owned by Full Truck Alliance Co. Ltd., are now facing Cyberspace Administration of China (CAC) investigations to ‘prevent national data security risks and safeguard national security’. These platform services have reportedly been banned from registering new users.

The moves follow hard on similar action taken against the leading ride-hailing company Didi Chuxing, which was ordered to remove its app from app stores. Existing users can seemingly continue to use their apps in all four cases.

A common thread connecting the companies is that their parent have all recently listed on the New York Stock Exchange, suggesting authorities are comfortable putting pressure on their stock market valuations to bring them into line and, in some likelihood, to wean themselves off US-sourced hardware and software as part of the push to develop indigenous technology.

It may also be part of a move to ensure that the growing reams of data on Chinese citizens, and, more darkly, on citizens worldwide as these app-based services expand globally, is held on Chinese servers and thus accessible to the state and, as importantly, not readily available to foreign companies and authorities.

Ride-hailing app data is potentially particularly sensitive as it includes location data.

Disruption to the business activity of even prominent Chinese tech firms is seen as a small price to pay to ensure alignment with Party’s geopolitical and economic agenda, as has been previously demonstrated with Alibaba’s fintech affiliate, the Ant Group