Citing Data Sharing As National Security Threat, Beijing Crackdowns On More Chinese Tech Firms Days After Blockbuster IPOs in U.S

Close on heels of crackdown on Didi, a giant ride-hailing firm which raised $4.4bn in the biggest American listing of a Chinese firm since 2014, Chinese regulators have opened a cybersecurity probe into more tech firms that have recently listed shares in U.S.

The Cyberspace Administration of China (CAC) said the probe had been opened to “prevent national data security risks” as the crackdown on the country’s technology sector continues.

CAC said that it has launched investigations against two commercial freight platforms -Yunmanman and Huochebang -both of which are subsidiaries of Full Truck Alliance and Boss Zhipin, which offers an online recruitment service.

In order to address national data security risks, maintain national security, and protect public interests, cyber security reviews will be conducted in accordance with relevant laws for Boss Zhipin and truck-booking platforms Yunmanman and Huochebang under Full Truck Alliance, according to a notice posted by the Cybersecurity Review Office on Monday.

Kanzhun, the owner of Boss Zhipin, was listed in NASDAQ on June 11. Full Truck Alliance, the Chinese service similar to Uber Technologies that connects freight shippers and truck drivers, dubbed "Didi in the truck freight area," conducted an IPO in the US on June 22.

China ordered app-store operators to remove the app of ride-hailing giant Didi Global Inc.’s China arm, saying it has serious problems involving illegal collection of personal data. The regulator alleged Didi had illegally collected users’ personal information and asked the company to fix the problems.

The Didi investigation marked the first time Beijing has publicly cited national security as a reason for launching an inquiry into one of the country’s tech giants.

In June, Beijing passed a new Data Security Law that lays out how companies

"These companies are now listed in the US. In this process, some important data and personal information held by the companies may be leaked due to US regulation. In other words, the listing in the US could lead to data's outbound security risks," Zuo Xiaodong, vice-president of the China Information Security Research Institute, told the Global Times.

Data security has elevated to a national security priority and its role as cornerstone for these firms and the economy should not be understated as data has become a new battleground for international race, said Liu Dingding, a Beijing-based independent tech analyst.

Data has emerged as big focus for the Chinese government.

Following the crackdown, the shares of major technology companies listed in Hong Kong including Tencent and Meituan were trading lower on Monday morning.