What You May Have Missed on the Didi Case (July 9, 2021)
PDF report attached
In light of today’s rally of Internet stocks in Hong Kong, it might be interesting to share I wrote on the infamous “regulatory crackdown” back in July 2021. Enjoy.
Key Takeaways:
Not a Clampdown but a Catch-up – China has no intention to suppress Big Tech Firms like Didi, Alibaba or Ant Financial. In Didi’s case, the government is trying to catch up on Internet regulation, including personal privacy and data security issues. We view such legislation as necessary and healthy for the industry.
No Interest in Causing Disruption – Didi has over 13 million drivers and 377 million users on its platform, the largest in China. Though taking action against Didi, the government will not risk disrupting the tax-hailing service, which could lead to job losses and public complaints.
Not Meant to Turn off U.S. Capital Market Access – The Didi case is not geared toward denying or restricting U.S. capital market access for Chinese companies. The government also has no prejudice against overseas listed companies. China may still view the China-U.S. investment relations as mutually beneficial.
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