China to allow Didi Chuxing app to return online: Reuters

Chinese authorities plan to allow Didi Global’s ride-hailing service and other apps to return to domestic app stores as soon as next week, five sources told Reuters.

Didi Chuxing to resume new user registrations and downloads of 25 banned apps in China, a key step in resuming normal business since regulatory troubles began in mid-2021. was awaiting approval from the authorities of

The lifting of bans on new users and the relaunch of apps for major ride-hailing services and other businesses could come before the Chinese New Year, which begins on Jan. 22, four sources said.

The week-long holiday in China will help Didi win new customers for its business and begin work to get things back to normal, the two sources added.

The lifting of the ban on the Didi Chuxing app comes as Chinese policymakers seek to restore confidence in the private sector and hope the tech industry will spur economic activity devastated by the Covid-19 pandemic.

Communist Party Governor Guo Shuqing of the People’s Bank of China (Central Bank) told state-run CCTV on Sunday that the central bank will step up support for private companies as part of measures to bolster the economy, while at the same time bolstering technology. He said he would ease the crackdown on businesses.

The app’s restoration also marks Didi’s completion of a year-and-a-half of regulatory-driven reforms, in which the China Cyberspace Administration (CAC), a powerful cyber watchdog, paid the company $1.2 billion in July. after imposing a fine of

Didi Chuxing already paid the fine last year. alibaba group When Meituan Two of the sources said they were fined $2.75 billion and $527 million respectively by the National Market Supervision Authority, an antitrust regulator, in 2021.

Didi did not immediately respond to Reuters’ request for comment.

The CAC and the State Council Intelligence Service, which handles inquiries from the government’s media, did not immediately respond to Reuters’ requests for comment.

Didi’s punishment is part of Beijing’s sweeping and unprecedented crackdown on Chinese tech giants over the past two years, slashing revenues and profits as hundreds of billions of dollars have been devalued.

China’s regulator, led by the CAC, has re-launched in recent weeks to move forward with the approval process for Didi’s app to reopen, two sources and another source familiar with the matter said.

The regulator, which submitted a report on the issue to the party leader last week, is looking to formally seek his consent in the next few days, the two added.

Founded in Beijing in 2012, Didi is backed by prominent investors including Alibaba. Tencent When Softbank Grouphas violated the CAC when it went ahead with a U.S. stock listing in 2021 against the wishes of regulators, sources previously told Reuters.

The move sparked regulatory issues for Didi, ordering 25 mobile apps to be removed from app stores, suspending new user registrations and fined for data security breaches.

Didi was also forced to end its 11-month journey as a New York Stock Exchange-traded company last June, moving from being an icon of China’s internet boom to a regulatory crackdown in Beijing. One of the biggest casualties.

The company has previously hoped a U.S. delisting and hefty fines would resolve regulatory issues, and expects to reopen the app in September after updating it to ensure compliance. rice field.

But after the Chinese Communist Party’s second congress in a decade and a change in central leadership in November, and Beijing’s abrupt lifting of stringent virus restrictions late last year, amid Covid-19 epidemics in many cities across the country. And the return of Didi’s banned apps has been delayed.

The delay in returning the app cast a shadow over Didi’s business plans.

Reuters reported in June that Didi Chuxing was in preliminary talks with state-owned Synomac Automobile Corp to buy a third of its electric vehicle division to mitigate the impact of the pandemic on its core ride-hailing business. reportedly under consideration.

The deal is largely subject to the app’s reopening for official announcements, two sources said.

Didi has also lost its edge and been hit hard by regulatory issues that have allowed rival ride-hailing services run by automakers Geely and SAIC to gain market share across the country. rice field.