What happened?
On 9 July, Beijing authorities ordered the removal of 25 more apps operated by Didi Global Inc, which provides ride-hailing and related online services.

On 7 July, China's antitrust authority imposed fines on Didi and another tech for failing to report their merger deals in advance. The regulator also stopped Didi from adding new users. 

On 6 July, China announced new rules on data security and cross-border data flows for Chinese companies, which seek to trade their shares abroad. On the same day, Didi's share value fell 4.6 per cent for the fifth day, which is 15 per cent below its debut price on the New York Stock Exchange, a week ago.

What is the background?
First, the rise of Didi Global. It is the biggest Chinese ride-hailing company with 20 million rides a day. It is an e-platform, which gathers real-time data of users every day, and is used to analyze traffic patterns. The app collects users' current location and trip route data for safety and data analysis. It also uses the car's camera to monitor road conditions for around 100 billion kilometres per year. The app operates in 16 other countries and has more than 377 million active users in China as of March 2021. 

Second, the Government scrutiny over tech operations. Beijing has been revamping its policies towards privacy and data security. In April, the government issued a second version of a draft on Personal Information Protection Law, which imposes stricter measures to ensure safe storage. Last year, in September 2020, the government implemented the Data Security Law, for which companies were required to process their "critical data", to conduct risk assessments and submit reports to authorities.  In May, the Cyberspace Administration of China (CAC) accused 105 apps of collecting excessive amounts of users' personal information and illegally accessing it. Beijing seems to be wanting to keep its data-rich firms under control for security reasons.

Third, differences between the government and China's tech conglomerates. For years, China provided a conducive environment for the growth of tech companies. Alibaba, Tencent, JD.com, with state support, grew in size and emerged as dominant players in the marketplace. However, over the past few months, the scrutiny over these companies has increased. In the past few months, Beijing has fined Alibaba USD 2.8 billion for antimonopoly violation, Alibaba backed Nice Tuan USD 200,000 for unfair competition practices. In November 2020, Ant Group, came under the watchdog scanner a few days before its massive IPO. The move thwarted the company's listing in Shanghai and Hong Kong. Similarly, the CAC announced an investigation into Didi soon after its IPO on 30 June in order to protect "national security and the public interest" citing the Beijing Cybersecurity Law of 2017. CAC said: "After checks and verification, the Didi Chuxing app was found to be in serious violation of regulations in its collection and use of personal information." 

What does it mean?
Beijing's action against the homegrown tech companies shows that politics and tech in China are intertwined. It also shows that the government discourages Chinese tech companies from listing in the US. 

Second, this shows Beijing's interest in keeping essential data within its borders and help domestic players to grow in an environment without unfair practices. Also, it indicates the government's interest in tech giants to show their loyalty towards the CCP.