China’s government is allowing ride-hailing firm Didi Global (DIDIY) to restart new user registrations in a sign that the country’s crackdown on technology companies is starting to ease.
The move is the latest sign that regulators in Beijing are loosening restrictions placed on tech companies in the nation of 1.4 billion people.
With approval from China’s Cybersecurity Review Office, Didi Global can resume adding new users immediately, according to a government statement.
Didi had been singled out for punishment during Beijing’s crackdown on the country’s tech sector.
Days after its $4.4 billion U.S. initial public offering (IPO) in June 2021, regulators banned Didi from app stores in mainland China and launched an investigation into its handling of customer data.
The company was eventually forced to delist its shares from the New York Stock Exchange (NYSE) and is now only publicly traded on Hong Kong’s stock exchange.
China’s government accused Didi of breaking privacy laws and posing cybersecurity risks. Their actions were also widely seen as punishment for the company’s decision to go public overseas instead of only in China.
The regulatory actions wiped tens of billions of dollars from Didi’s market capitalization and hit its domestic business hard. The Chinese government also fined Didi $1.2 billion U.S. for violating cybersecurity and data laws.
The lifting of a ban on new users comes after Beijing signaled the softening of its stance on the country’s tech sector. Earlier in January of this year, the government said its crackdown on more than a dozen internet companies was ending.
China’s crackdown on tech companies began in 2020 with new regulations on financial technology (fintech) firms. Regulators then targeted several of China’s tech giants, including Alibaba (BABA) and Tencent, among others.
The pivot now is largely seen as an effort by China’s government to spur economic growth. The Chinese economy is slowing because of the country’s stringent COVID-19 policies and as the global economy decelerates.
