Tthis week, shares of China’s giant rideshare app Didi crashed by more than 20%. Days earlier, Didi had raised $ 4.4 billion in a massive New York IPO – the largest initial public offering by a Chinese company since Alibaba debuted in 2014.
The immediate cause of Didi’s crash was an announcement by the Chinese Cyberspace Administration that it suspected Didi of illegally collecting and using personal information. Pending an investigation, he ordered Didi to stop registering new users and remove Didi’s app from Chinese app stores.
Chinese state-owned Global Times noted in an editorial Monday that Didi has the âmost detailed personal travel informationâ of users of any major tech company, and that the company poses a potential risk to individuals because it could perform big data analysis of users. habits and behaviors.
But since when has Beijing been concerned about the privacy of Chinese citizens? The Chinese government is doing everything in its power to spy on them.
More likely, the massive New York IPO sparked concern in Beijing that the United States could have access to huge amounts of personal information about where the Chinese live, work and travel – Data that could threaten China’s national security.
China’s competition regulator on Wednesday fined several internet companies, including Didi, for allegedly breaking the country’s antimonopoly law.
The emerging Cold War between Beijing and Washington is less about traditional weapons and more about data – the collection, aggregation, analysis, and maximum use of it to outsmart the other side. Cyber ââsecurity depends on which side has access to more information about the other and can use it best.
This week, China also announced that it will tighten the regulation of technology companies listed overseas, monitoring the type of information they send and receive across the country’s borders. The official rationale: to ensure that Chinese customers are safe from cybercrime and personal information leaks. The probable reason: national security.
Politicians in Washington are almost as nervous as politicians in Beijing about the flow of information to the other side.
Senator Marco Rubio told the Financial Times that it was “reckless and irresponsible” for the New York Stock Exchange to allow Didi to sell shares. His avowed concern? Protect American retirees.
âEven if the stock rebounds, US investors still have no idea of ââthe company’s financial strength because the Chinese Communist Party is preventing US regulators from reviewing the books,â Rubio huffed. “It endangers the investments of American retirees and sends desperately needed US dollars to Beijing.”
Please. If Rubio and other U.S. lawmakers were serious about protecting U.S. investors, Rubio and his colleagues would try to restrict the inflow of U.S. savings into China through U.S. pension funds, mutual funds, and funds. traded on the stock exchange.
Yet Chinese companies now form the largest share of the major emerging market indices guiding the movement of US savings around the world. And despite escalating geopolitical tensions, China’s allocation has increased dramatically in recent years. Global bond indices have even added Chinese government bonds to their portfolios.
U.S. portfolio investments in Chinese companies and government securities could total more than $ 1 billion by the end of 2021.
The real concern of US lawmakers about Didi and other large Chinese tech companies that are financially establishing themselves in the United States is that they could collect tons of data about the United States, and yet they are responsible. in front of the Chinese government – in other words, the mirror image of Beijing’s concern.
Beijing and Washington’s data security concerns are understandable. Yet, from a practical standpoint, the two economies are closely linked. Officially, the Chinese economy is still state and communist. Unofficially, its hi-tech leaders are as capitalist – and have become almost as rich – as their American counterparts.
Entrepreneurs and financial wizards in China and the United States understand that the two nations together constitute the world’s largest market. They will continue to do whatever they can to make money in this giant market, regardless of the growing techno-nationalism of their respective politicians.
This means that the most interesting conflict to come is not between China and the United States as such. It is between the business elites of the two countries who are looking for big profits and the political elites of the two countries who want to protect their country and, in doing so, their own centers of power.