That would be the most violent blow to date in the Chinese government's campaign against the domestic Internet industry, which has been going on for over a year: According to the Bloomberg news agency, the Chinese transport service Didi, which was listed on the New York Stock Exchange (NYSE) in the summer had raised $ 4.4 billion from investors, to leave the stock market on Beijing's orders. 

Hendrik Ankenbrand

Business correspondent for China based in Shanghai.

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After its IPO on June 30, Didi was valued at $ 68 billion - around $ 13 billion less than its American competitor Uber is currently worth on the capital market.

The Chinese Communist Party, which celebrated its 100th anniversary one day later, did not find the Beijing technology company's success to celebrate.

Government officials investigated at corporate headquarters

Allegedly, regulators had previously expressed concerns that going public in the United States could give the American government access to data on passengers, destinations and video recordings of Didi taxis in China.

Didi is said not to have paid much attention to the warnings.

Two days after the IPO, the Chinese government banned the service from any new business and had the Didi app deleted from the app stores in China, whereupon the share price of the newly listed company on the NYSE collapsed.

Government officials from various agencies and ministries later entered the company headquarters for an investigation into the "cybersecurity" of the Didi business.

In China, there was speculation that the company was threatened with an "unprecedented penalty".  

According to the “Bloomberg” report, this could be even higher than expected. Accordingly, leading managers of the group had received the order from the regulators to work out a plan for a de-listing from the New York Stock Exchange. Investors should therefore be offered at least $ 14 per share for a buyback, the issue price at the time of going public. However, it is also conceivable to have the company listed on the Hong Kong stock exchange again after a de-listing in New York. 

The capital markets in Asia reacted promptly to the report on Friday morning.

On the Tokyo stock exchange, the share price of the conglomerate Softbank, which holds more than 20 percent of Didi, lost 5 percent by early afternoon.

Because investors interpret the crackdown on Didi as yet another blow to China's tech industry as a whole, the country's other large Internet companies also lost.

Other tech stocks are also affected by the developments

Tencent's share price on the Hong Kong stock exchange fell by more than 3 percent by the afternoon.

Alibaba shares also lost a similar amount.

Meituan, a delivery service from which over 1000 Chinese meals can be ordered, even fell by more than 4 percent. 

In fact, most observers assume that the Chinese government's campaign to regulate the until recently extremely powerful and entirely privately owned tech corporations is far from over and is only just picking up speed. One can only speculate about the reasons why Beijing accepts that the successful companies will lose immense value and are downright mutilated by the tough state interventions, since almost nothing leaks out from the leadership, which operates exclusively in secret. 

From speeches by the state leader Xi Jinping, editorials in the party press and the government's five-year plan presented in the spring, however, it can be deduced that the influence of the Internet companies on the everyday lives of the 1.4 billion Chinese has become too great for the CP and that the companies are under the de facto control of the state should be brought. In addition, according to Xis, the tech providers are investing in the wrong areas.

The state leader is obviously against the grain that the innovative strength of Alibaba, Didi & Co. has so far produced business models with which the companies earn money from the consumption of Chinese consumers. However, Xi wants the tech companies to develop hardware like semiconductors. Because China has not yet been able to produce competitive high-performance chips, it has to source them from the USA, among others.

In the case of the smartphone manufacturer Huawei, which Washington cut off from American chips, this highlighted the vulnerability of the People's Republic during the trade war. In order to achieve self-sufficiency, the party has therefore drawn up the plan for a “dual cycle”. This means that the Chinese state and private sector should develop globally leading high technology in a joint national effort.

How the private Internet companies are to be brought on the party line, Beijing began to show in the fall of last year.

At the time, it canceled the IPO of the financial services provider Ant Financial at almost the very last minute after founder Jack Ma publicly criticized the government for overly strict regulation.

The share price of the Ant parent company Alibaba has since lost 56 percent of its value.

The shares of the game developer Tencent, which the party accused in the spring of dumbing down the Chinese youth and, like Alibaba and other Internet companies, has fallen by almost 40 percent since then.