According to observers, the harsh action taken by the Chinese government against the transport service provider Didi Chuxing shortly after its IPO in New York could accelerate the decoupling of the American capital market from China's economy.

Hendrik Ankenbrand

Business correspondent for China based in Shanghai.

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    Patrick Welter

    Correspondent for business and politics in Japan, based in Tokyo.

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      Roland Lindner

      Business correspondent in New York.

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        On Friday, the Beijing Ministry of State Security announced that it would examine the company, which is also based in the Chinese capital, for threats to China's cybersecurity.

        From now on, Didi Chuxing is not allowed to accept any new customers in China until further notice.

        In the Chinese market, in which Didi has a share of around 80 percent, the world's second largest transport service after its American competitor Uber makes 95 percent of its sales.

        Didi: Customer data is stored in China

        Didi, which claims to make around 40 million journeys a day, can continue to serve its existing customers. But the fact that the Didi app can no longer be downloaded in China is a severe blow for the company. This had been listed on the Nasdaq New York Stock Exchange just two days earlier and had raised $ 4.4 billion in capital. After the investigation in China became known, the price of the share fell by almost 6 percent compared to the previous day.

        On the one hand, Beijing is apparently concerned that the data from around 380 million Didi customers in China could get abroad. In April of last year, a total of 12 Chinese government agencies issued new rules under which companies are examined whose suppliers pose a threat to national security. Didi claims all of his data is stored in China. Beijing may also be angry that Didi had accelerated its IPO in the US against the will of Chinese regulators. In this case, in the worst case scenario, the transport service could face the withdrawal of its transport license in China, writes Ernan Cui from the Beijing analysis company Gavekal Dragnomics.

        The American stock exchange regulator will shortly announce how it will deal with the Chinese companies listed in the USA that do not meet the required disclosure requirements because the Chinese government does not allow them to do so. In view of Beijing's actions only two days after the IPO, the American supervisory authority could order that the companies from China have to go off the stock exchange by 2024, writes observer Cui.

        Didi has prominent major American shareholders. The electronics company Apple bought a stake worth one billion dollars in 2016, and as part of the investment, it also got a seat on the board of directors. It was never entirely clear what his intentions were and whether this was possibly related to his alleged plans to develop his own car. CEO Tim Cook said only vaguely at the time that Apple was investing in Didi "for several strategic reasons", including to learn more about certain segments of the Chinese market. "Of course we also believe that this will also bring a strong return on our capital over time," he added. The American car service Uber has also been part of the Chinese shareholder group since 2016.At the time, Uber sold its own Chinese subsidiary to Didi and received a share in Didi that has since been reduced to 12 percent.

        A risk for investors too

        Beijing's offensive action against successful companies listed abroad is also developing into a risk for Japanese technology investor Softbank Group.

        In the past few months, the company, with around 25 percent the largest shareholder, was affected by the share price losses of the Chinese Internet department store Alibaba.

        Softbank is also the largest shareholder in Didi Chuxing.

        Accordingly, the Japanese share lost 5.4 percent on the Tokyo stock exchange on Monday.

        Before Didi went public in the United States, Softbank had invested nearly $ 11 billion in ridesharing. The Softbank Vision Funds holds around 20 percent. It is the Fund's largest single investment in a technology company. Softbank is also indirectly affected because it is the largest investor in the American ridesharing service Uber, which is the second largest shareholder in Didi. Softbank is also involved in Full Truck Alliance, which is also being investigated in China.