China reaffirms opening-up policy amid talks of financial decoupling from US
Published: Jul 08, 2021 09:13 PM
A man looks at the entrance of a Didi driver club in Shanghai in May.Photo: VCG

A man looks at the entrance of a Didi driver club in Shanghai in May.Photo: VCG

China's Foreign Ministry on Thursday stressed that China's policy for opening up to the world and supporting online platforms remain intact, as discussions that a long-feared China-US financial decupling may have started intensified in recent days after Didi Chuxing's regulatory woes. 

Given the tremendous risks from the US' escalating crackdowns on Chinese companies, including demanding extra data and information, there could be a freeze in US listings of Chinese companies, analysts noted.

In response to questions about the impact of the Didi cybersecurity review on other Chinese companies that are listed abroad, Wang Wenbin, a spokesperson for the ministry, told a regular press conference that the aim of the review was to prevent risks and safeguard national security.

Wang stressed that China's policy of opening up and supporting internet platforms' development has not changed, and the country will continue to encourage companies to aim for the global market, and enhance communication and cooperation with the world.

"Didi's largest and second-largest shareholders are foreign companies. Its operation in China itself showed the country is pretty open," said Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China.

The ride-hailing provider manages large volumes of data that relate to the national transport infrastructure, flows of people and vehicles, and other types of personal information including ID numbers, phone numbers, bank accounts, and audio and video recordings, according to some analysts.

On Sunday, the Cyberspace Administration of China ordered app stores to drop Didi from their platforms in China due to its serious violations of laws and regulations in the collection and use of personal data. The move came days after the company's $4.4 billion IPO on the New York Stock Exchange. 

"If a US department has a problem with the listings of Chinese companies, it can communicate with the China Securities Regulatory Commission to see what kind of information could be provided after data mark," Dong said, "If it wants to take away the 'manuscript' (original data) or wants more, it's highly possible that it has other motives."

Predicting a freeze on Chinese companies' listings in the US in the second half of the year, he said that some companies are already fed up with the unfair treatment in the US stock market and the rising costs.

The US Senate recently passed a bill that would allow regulators to kick foreign companies off US bourses if they hadn't complied with audit rules for two years instead of the previous three.

"The Didi case exposed two long-standing problems: the US hegemony in setting rules and its long-arm jurisdiction… China has sovereignty and cannot accept the US' reaching out to review data threatening to China's national security," Dong said.

Didi is facing at least two lawsuits filed in courts in New York and Los Angeles this week, after its shareholders were caught off guard by the review, media reports said.

"At least five Chinese shareholders have consulted our law firm about bringing class-action litigation against Didi, citing the grounds that the company failed to disclose serious adverse facts and misled investors," Hao Junbo, chief lawyer at the HAO Law Firm in Beijing, told the Global Times on Thursday. "The odds of winning are good."

A woman surnamed Lü from Beijing had held an optimistic view about the company's development because she said it had changed the traditional mode of travel in China. She bought 500 shares of Didi stock at around $14 per share on July 1, the second day after the company started trading in New York. 

"Now, I am considering selling the stock," she told the Global Times on Thursday, after the shares plunge by as much as 25 percent on Tuesday.