Newsletter 124 - July 24, 2022
Welcome to the 124th edition of Trade War.
Didi Global is fined $1.2 billion for ‘despicable’ data violations. Property developers halt work on projects and mortgage crisis deepens. China’s leaders fret about middle-income trap. And 10,000 high-net-worth Chinese are aiming to pull $48 billion out of China this year, second in scale only to Russia.
Planned Nancy Pelosi trip to Taiwan upsets Biden administration and angers China. HSBC investment bank gets a party committee and other banks shiver. Money managers consider cutting China exposure. And Beijing seeks to be ‘strong and prosperous’ with new Space Station.
Lots more inside plus my top five picks of must-read China business books.
*Want to read more than an abbreviated version & avoid the pesky paywall? Subscribe!*
Get the full scoop from Trade War. Subscribe and learn what’s really happening in China this week and every week.
Didi Global fined $1.2 billion over data misuse
China’s cyberspace regulator has fined Didi Global $1.2 billion for data violations, report the South China Morning Post’s Che Pan and Coco Feng.
Top executives Will Chengwei and Jean Liu Qing were also each fined one million yuan. The punitive actions come after a yearlong investigation that began just days after the ride-hailing giant’s $4.4 billion IPO in New York, in late June of last year.
Didi committed 16 offenses related to the illegal collection of driver and passenger data involving 64.7 billion personal information entries over seven years, according to the Cyberspace Administration of China.
“Didi has failed to perform its duty to maintain cyberspace security, data security, and personal information protection . . . bringing serious risks to national cyberspace security and data security,” the regulator said.
“Moreover, even with clear orders from regulatory authorities to correct the issues, Didi failed to carry out comprehensive and in-depth rectifications. The nature of the offense was egregious.”
Didi recently started trading on the over-the-counter market following a vote by shareholders to delist from the New York Stock Exchange.
“The CAC might back off soon, but that's not the end of Didi's regulatory woes. Market regulator SAMR [State Administration for Market Regulation] has hinted they may review the Didi-Uber merger from 2016, and Didi still has the second-worst legal ride compliance rate in the country, which pisses off [the] Ministry of Transport,” tweets Trivium China tech analyst Kendra Schaefer.
“Excessively collected 8.323 billion pieces of information”
”The data-collection practices Chinese regulators fined ride-hailing company Didi for are quite eye-opening,” tweets Bloomberg News’ Tom Hancock, citing Pekingnology.
‘Despicable’ and ‘malicious evasion’ of regulators
China’s regulator called Didi’s behavior “despicable” and accused the company of
Keep reading with a 7-day free trial
Subscribe to Trade War to keep reading this post and get 7 days of free access to the full post archives.