China’s latest salvo against Chinese tech giants targets ‘pop-up’ ads
Chinese tech giants Tencent and 13 other tech companies were ordered by the Chinese government to address “harassing” pop-up windows on their apps that officials said could contain misleading information. This move makes this the latest of China’s harsh crackdowns on the nation’s digital companies.
The order came as Chinese bike-sharing firm Hello scrapped plans for a New York IPO whilst Beijing tightens the reins on domestic firms looking to list overseas.
China recently unleashed a torrent of orders and regulations targeting tech companies, which has rattled global markets.
Investor anxiety prompted state media on Wednesday to publish articles saying markets would stabilize and that the new rules would prove beneficial in the long run.
The directive against pop-ups, which are often used for in-app advertisements, follow a series of probes into monopolistic behavior and data security in the tech industry. The Ministry of Industry and Information Technology said failure to abide by the order would mean penalties.
The crackdown has hit some of China’s biggest IT firms hard, including many listed in the United States such as ride-hailing giant Didi Chuxing, as well as those who are intending to file overseas IPOs.
The state government has also recently proposed new rules requiring that Chinese companies seeking to list abroad undergo a cybersecurity review.
Outside of the tech sector, investors have been pushed into a flummox as Beijing posted a series of new rules for the private education and food delivery sectors.
According to Bloomberg, nearly US$1.5 trillion had since been wiped off the value of companies in Hong Kong and mainland China. Tencent shares sank more than five percent Wednesday, adding to a three-day, 18 percent sell-off.
In response to these events, Chinese media came out Wednesday to calm the storm.
The sharp drops in stocks were “unsustainable” and indexes were expected to gradually stabilize, said the Securities Daily.
Another publication, the Securities Times, added: “While adjustment of policies in some industries may affect their current business model, it will be beneficial toward unleashing more social vitality in the mid-to-long term and aid consumption in most other areas.”
Private tutorial firms became subject to heavy selling after officials announced new rules over the weekend compelling them to register as non-profit organizations and banning them from raising capital or going public.
That effectively smashed the business models of many multibillion-dollar enterprises.
As Beijing cracks down on domestic tech companies, Taiwan is investigating the hacking of the LINE messaging app accounts of officials spanning the political spectrum.
Taiwan’s cybersecurity agency says the island faces an estimated 30 million cyber attacks monthly, with around half believed to originate from China.
Taipei has accused Beijing of stepping up cyberattacks since the 2016 election of President Tsai Ing-wen, who rejects Beijing’s stance that the island is part of “one China”.
China regards Taiwan as a breakaway province which it has vowed to retake, by force if necessary. But Taiwan’s leaders say it is clearly much more than a province, arguing that it is a sovereign state.
Although relations between China and Taiwan started improving in the 1980s, Taiwan has for decades, been resistant to China’s attempts to reunite the two nations.
China’s formula, known as “one country, two systems”, promises that Taiwan would be given significant autonomy if it accepts the reunification.
Post Tsai’s appointment, China has been resorting to pressuring international companies to list Taiwan as part of China by threatening to block business opportunities in China should they fail to comply.
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