Jan 13 (Reuters) – Chinese authorities are set to allow ride-hailing app Didi Global and other apps back on local app stores as soon as next week, five sources told Reuters, in a further sign that their two-year regulatory crackdown is on the way. technology. sector ends.
Didi is awaiting authorities’ approval to resume new user registrations and downloads of its 25 apps banned in China as a key step to resuming normal business since its regulatory troubles began in mid-2021.
Four of the sources said that the lifting of the new ban on users and the resumption of applications for their main services for calling flights and other business may take place before the Lunar New Year, which begins on January 22.
Two of the sources added that the week-long holiday period in China would help Didi begin to attract new customers to the company and work towards getting it back to normal.
The lifting of the ban on Didi apps will come as Chinese policymakers seek to restore private sector confidence and rely on the tech industry to help stimulate economic activity devastated by the COVID-19 pandemic.
Guo Shuqing, the Communist Party chief of the People’s Bank of China, told state-owned CCTV on Sunday that China’s central bank will step up support for private firms as part of steps to shore up the economy, while easing a crackdown on technology companies.
Restoring the apps would also mark Didi completing a year-and-a-half-year revamp driven by regulation, and would come after China’s powerful Cyberspace Administration (CAC) in July fined the company $1.2 billion.
Didi already paid the fine last year, the largest regulatory penalty imposed on a Chinese technology company since Alibaba Group (9988.HK) and Meituan (3690.HK) Two sources said a fine of $2.75 billion and $527 million, respectively, will be imposed in 2021 by the anti-monopoly regulator the State Administration for Market Regulation.
Didi did not immediately respond to a Reuters request for comment.
Neither the CAC nor the State Council Information Office, which handles media inquiries for the government, did not immediately respond to Reuters requests for comment.
The punishment imposed on Didi was part of Beijing’s sweeping and unprecedented crackdown against the country’s tech giants over the past two years that has slashed hundreds of billions of dollars in values and slashed revenue and profits.
Two sources and another source familiar with the matter said Chinese regulators, led by the CAC, have appealed in recent weeks to move forward with the approval process for Didi’s appeal.
Two of them added that the organizers, who last week submitted a report on the matter to the party’s senior leaders, are looking forward to obtaining the latter’s formal approval in the next few days.
Didi was launched in Beijing in 2012 with the backing of high-profile investors including Alibaba and Tencent (0700.HK) and SoftBank Group (9984.T)ran afoul of CAC when it went ahead in 2021 to list its shares in the US against the regulator’s will, sources previously told Reuters.
The move raised regulatory problems for Didi, ordering 25 mobile apps to be removed from app stores, suspending registration of new users, and being fined for data security breaches.
Didi, too, was forced to end its 11-month journey as a New York-traded company in June last year, turning from a baby image of China’s internet boom into one of the biggest victims of Beijing’s regulatory crackdown.
The company had previously hoped the US delisting and heavy penalty would ease its regulatory woes, two sources said, and expected to restart apps in September after updating them to ensure compliance.
However, the return of DiDi’s banned apps has been delayed amid China’s ruling Communist Party’s biannual congress and central leadership reshuffle in November and COVID-19 outbreaks in many cities across the country after Beijing abruptly lifted strict virus restrictions late in the year. Past.
The delay in the apps’ return cast a shadow over Didi’s business plans.
Reuters reported in June that Didi was in advanced talks with state-backed Sinomach Automobile (600335.SS) to purchase a third of its electric vehicle unit in an effort to help mitigate the impact of the pandemic on its core passenger business.
The two sources said that this deal is primarily subject to the resumption of applications for the official announcement.
Didi has also been hit hard by regulatory problems that have eroded its dominance and allowed competing ride-hailing services run by automakers Geely and SAIC Motor (600104.SS) To gain market share all over the country.
Additional reporting by Julie Zhou, Kevin Huang and Xu Jing; Editing by Sumit Chatterjee and Muralikumar Anantharaman
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