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China’s Zero Tolerance Approach May Come As A Major Threat To Large Tech Based Firms – Here Is How.


Over the past month’s China is constantly working towards blocking the activities of certain big tech companies, the main reason behind this is to reduce the competition for smaller companies. If these big companies became more powerful then they would start manipulating and controlling the market which will affect the small producers. To protect the interests of these small producers China has started blocking plans of these big companies.

In Beijing, there has been an attempt made by the state to seize data privacy thus stopping the campaign that threatens to cut certain companies off from international financing. 

Earlier we saw a similar case where the carpooling app, DiDi app, was taken down as the app was seen misusing sensitive data of the users. The app was completely taken down in China.

DiDi app which entered China in the year 2012 was a ride-hailing, food delivery, package delivery, and bicycle sharing app. The app entered China and pushed out and removed Uber from the Chinese market completely. But now the DiDi app has been banned in China and removed from the play store.

The market value of the app has also fallen down with a total loss of $29 billion. The app whose shares were rising in the New York stock market on Tuesday and raised even more on Wednesday saw a huge pulldown due to the ban.

The company assured that it would look into the issue and will not engage in exploiting the private data of the users. It would fix the problem and also would not create any cyber attack risks for China.

Banning the DiDi app does have its consequences on the revenue of China.

China has recently stopped the activities of two companies one is a truck-hailing company called Full Truck Alliance and the other is a job listing company called Kanzhun. Both these companies were listed in the New York stock exchange market. Chinese regulators have blocked their activities as they seem to exploit the private data of users and it can be harmful for the nation. China fears that it can lead to national security risks.

Due to the blocking of these two businesses their shares have fallen by 11% and 12% respectively. 

Chinese regulators have been taking down big firms and not tolerating them. China has started taking these big firms accountable for the ferocious activities they engage in and the damage to do to the nation. This all started when Jack Ma’s Ant Group IPO was put back due to certain issues in its listing. After this incident Beijing has started investigating big firms as well like Alibaba, Tencent to make sure they do not indulge in anti-monopolistic activities and to protect consumer rights.

Due to misleading activities, Alibaba was fined $2.8 billion in April while Ant Group was told to remodel the listing.

Tesla too underwent data security allegations in China. Musk publicly expressed that his cars would never be used to spy on China. Tesla even confirmed that it has developed a new technology that will store Chinese private data in China only and will not travel to the USA.

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