China is preparing to fine ride-hailing giant Didi Global Inc (滴滴) more than US$1 billion to wrap up a long-running probe, media reports have said, boosting investors’ hopes that the country’s tech crackdown is winding down.
Didi, once known as China’s answer to Uber Technologies Inc, has been one of the highest-profile targets of the widespread clampdown on the sector, which saw years of runaway growth and supersized monopolies before regulators stepped in.
The fine — imposed over Didi’s cybersecurity practices — would amount to more than 4 percent of its US$27.3 billion revenue last year and pave the way for its new share listing in Hong Kong, the Wall Street Journal reported on Tuesday.
Photo:Bloomberg
Citing unnamed sources familiar with the matter, the newspaper said that once the fine is announced, the Chinese government would ease its restrictions on Didi’s operations.
The firm was prevented from adding new users, and regulators ordered its apps removed from online stores in China.
The Wall Street Journal report triggered a rally in Chinese tech shares in Hong Kong yesterday, with investors hopeful that the two-year regulatory storm that swept the sector was nearing its end.
E-commerce giant Alibaba Group Holding Ltd (阿里巴巴) soared 4 percent, while gaming titan Tencent Holdings Ltd (騰訊) gained 2.5 percent in early trade.
If confirmed, Didi’s fine would be the largest imposed on a Chinese tech company since Alibaba was told to pay US$2.75 billion in April last year over anticompetitive practices.
Didi did not respond immediately to an e-mailed request for comment.
China’s regulatory crackdown this year eased, as the country grapples with the economic fallout from its “zero COVID-19” strategy, with China struggling to reach its 5.5 percent growth target.
However, there is still a strict regulatory environment for tech firms.
Chinese President Xi Jinping (習近平) last month called for stronger oversight and better security in the financial tech arena.
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