According to media reports, China is preparing to hit ride-hailing giant Didi with a fine of more than US$1 billion to wrap up a long-running probe.
The latest move is seen as boosting investor hopes that Beijing’s tech crackdown is winding down.
Didi 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 per cent of its US$27.3 billion total revenue last year and pave the way for its new share listing in Hong Kong.
Along with the fine, the regulators will also allow Didi to restore its app to domestic app stores and proceed with its plan to list its shares on the Hong Kong Stock Exchange, according to the reports.
Did, the once celebrated in China as the ride share darling, could wrap up a year of turbulence if the move materialises.
Even tough the fine is no small number, but it can be read as a win-win in which the authorities show who’s in power and Didi gets to gradually head back to business as usual, albeit under much more oversight.
Also this move on imposing fine could be interpreted as paving the way for Didi’s Hong Kong listing. The IPO listing was reportedly put on hold after China’s top Internet watchdog told executives their proposals to prevent security and data leaks were insufficient.
China’s regulatory crackdown has eased this year as it grapples with the economic fallout from its zero-COVID strategy, with the country struggling to reach its 5.5 per cent growth target.
However, there is still a strict regulatory environment for tech firms: President Xi Jinping last month called for stronger oversight and better security in the financial tech arena.
