Chinese ride-hailing giant Didi Chuxing resumes new user registrations, marking latest sign of a thaw in Beijing’s scrutiny of tech sector

The Cyber Security Review Office gave Didi the green light to resume user registrations several months after concluding its investigation of the firm
The Beijing-based company has vowed ‘to safeguard the platform’s facilities and big data, and maintain national network security’

Didi Chuxing

Coco Fengin Beijing

Published: 6:40pm, 16 Jan 2023

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Didi Chuxing on Monday resumed new user registrations in the world’s largest ride-hailing market, nearly 18 months since regulators ordered a halt to customer enrolment in line with a cybersecurity review of the company.

“With the consent of the Cyber Security Review Office, new user registrations in the Didi Chuxing app will resume immediately,” the company announced on its official account on Chinese microblogging service Weibo. “Over the past year or so, we have carefully cooperated with the cybersecurity review, taken the security issues found in the review seriously and carried out comprehensive rectification.”

The Beijing-based company also vowed to “take effective measures to safeguard the platform’s facilities and big data, and maintain national network security”.

Formed in 2020 as a joint task force of 12 Chinese ministries, the Cyber Security Review Office initiated the investigation into Didi, just two days after the company raised US$4.4 billion from its initial public offering on the New York Stock Exchange under the name Didi Global on June 30, 2021.

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That marked the first time Beijing had publicly launched an investigation into a tech company on the grounds of national security, which triggered a sell-off in Chinese tech stocks in both New York and Hong Kong at the time.

Internet watchdog the Cyberspace Administration of China (CAC), one of the government agencies represented in the Cyber Security Review Office, ordered the removal of Didi’s apps from the country’s various app stores in July 2021.

After the CAC slapped Didi with a fine of 8.026 billion yuan (US$1.2 billion) in July last year for 16 data violations, the company’s apps remained unavailable for download.

The resumption of new user registrations, however, means that Didi’s apps will soon be available again, according to a person familiar with the matter.

The green light given by authorities to Didi reflects the shift in Beijing’s hardline regulatory stance on the domestic tech industry, as the country is set to record its second-lowest economic growth in almost 50 years.

Didi’s resumption of user registrations is not only “good news” for the company, but marks “a course correction [for the government] that is long overdue”, according to a Twitter post on Monday by Angela Zhang, an associate professor at the University of Hong Kong’s Faculty of Law.

“We are now seeing a mobilisation of bureaucratic efforts to revive the Chinese tech sector from various fronts,” Zhang said.

China’s leadership, headed by President Xi Jinping, called on the country’s Big Tech firms to help bolster economic growth at the conclusion of the two-day Central Economic Work Conference in Beijing on December 16. The closed-door annual meeting, convened by the Central Committee of China’s Communist Party, sets the tone and draft policy guidelines for the world’s second-largest economy.

Earlier in December, Chinese authorities significantly reduced fines slapped on those who provide unlicensed ride-hailing services, months after the State Council moved to relax penalties in the transport industry to introduce further local administrative discretion.

That and other revisions signalled the central government’s efforts to improve the legal framework covering the country’s ride-hailing services market.

Still, restoring Didi’s capability to sign up new customers comes at a time when the company has started a new round of lay-offs affecting hundreds of jobs amid increased competition.

Didi’s job cuts show that restructuring is still under way at China’s Big Tech firms amid weak consumer spending and a flagging domestic economy, following Beijing’s decision last month to lift its strict zero-Covid-19 policy after three years.

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