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China’s Big Tech crackdown: How an obscure office in Beijing’s cybersecurity administration has struck fear into the country’s tech giants

  • The Didi move, the first time Beijing publicly launched a probe into a tech company on national security grounds, triggered a global sell-off in Chinese tech stocks
  • While the Cyber Security Review Office remains opaque, there is little doubt it will play a significant role in supervising China’s internet industry

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The app of Chinese ride-hailing giant Didi is seen on a mobile phone in front of the company’s logo in this illustration picture taken July 1, 2021. Photo: Reuters

An obscure bureaucratic office in Beijing has emerged as one of the most feared government institutions for China’s Big Tech as Beijing clamps down on what it sees as cybersecurity risks in the internet sector.

The Cyber Security Review Office was created last year as a joint task force by 12 Chinese ministries, including the Ministry of Public Security and the Ministry of National Security, to look into cybersecurity risks.

“The state has a cybersecurity review requirement, and this office was created to get the job done,” one Beijing-based regulatory source who has direct knowledge of the matter said.

The office, under the Cyberspace Administration of China (CAC), had been out of public view for a year until last week when it dropped the bombshell that it was putting ride-hailing giant Didi Chuxing under review over possible data security and national security risks.

The action, taken just two days after Didi raised US$4.4 billion in a New York IPO, was said to be justified under China’s National Security Law, its Cybersecurity Law, and a set of guidelines called the Measures for Cybersecurity Review.

It marked the first time Beijing publicly launched a probe into a tech company on national security grounds, and triggered a sell-off in Chinese tech stocks in both New York and Hong Kong, with Didi seeing one-third of its market valuation evaporate over the last three trading days.

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