JAKARTA (THE JAKARTA POST/ASIA NEWS NETWORK) – Nearly every government is having problems with the growing influence of tech companies, whose borderless operations present challenges for state regulation and oversight.
As the United States grills Facebook, Twitter and Google about misinformation and data protection, China has begun its own crackdown on its internet giants that have been listed on foreign stock markets, claiming data security concerns.
The Asian power’s approach is drastic. While it is ostensibly seeking to protect its citizens’ global data privacy, China’s policies have effectively terminated the international ventures of many of its home-grown tech companies, which were benefiting considerably from large-scale foreign market capitalisation.
Chinese ride-hailing company Didi is the latest firm to take the regulatory hit. After making a US$4.4 billion (S$6 billion) debut on the New York Stock Exchange, the company announced plans to delist last week.
It did not specify why, but the decision came after reports that Chinese regulators had banned Didi from the country’s app stores and prevented it from accepting new users.
Last year, Chinese regulators halted – at the last minute – the planned IPO of Ant Group, the largest e-commerce company in the country, in Hong Kong and Shanghai after they summoned Ant’s Jack Ma for questioning and deemed the company unfit for the listing.
While the crackdown has caused concern among investors, China’s domestic muscle flexing may provide opportunities for other Asian tech companies to fill the gap, including those from Indonesia.
As South-east Asia rapidly digitises, many regional tech companies have announced plans to try their luck on US stock markets.
Singapore’s Grab has already started to trade in New York, cooperating with special purpose acquisition company (SPAC) Altimeter Growth Corp. in a deal worth US$40 billion. Indonesia’s GoTo, the result of the merger of ride-hailing behemoth Gojek and e-commerce giant Tokopedia, is also looking to list in New York.
Grab’s shares slumped days after its heady US debut, and Indonesia’s e-commerce colossus Bukalapak has faced similar challenges after its listing on the Indonesia Stock Exchange (IDX). But these fluctuations should not discourage investors because the tech companies’ stock prices will stabilise over time. In fact, the Financial Services Authority (OJK) has eased regulations to entice more home-grown tech companies to debut on the local stock market.
These South-east Asian tech giants must work hard and be resilient to maintain their valuations and later surpass them. Improving data security is another challenge that must be addressed without delay.
As transactions and data know no borders, the protection of customers’ right to privacy should be a priority. If data theft is rampant and tech companies cannot shield their customers from cybercriminals, solutions like China’s may become tempting for regulators.
- The Jakarta Post is a member of The Straits Times media partner Asia News Network, an alliance of 23 news media organisations.
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