Beijing crackdown on Chinese tech giants

Beijing crackdown on Chinese tech giants

July 14, 2021: -As the anti-monopoly of China and data security crackdown creeps into restrictions on U.S. IPOs, analysis is showing that some of the biggest tech companies of the country are deeply invested in those overseas stock offerings.

Gaming and social media giant Tencent is still the dominant corporate shareholder, with significant stakes in half of the 25 largest fundraises by companies of China that issue American Depositary Receipts (ADRs) in the U.S. since the year 2017. That’s according to CNBC analysis of publicly available data accessed through Wind Information and S&P Capital IQ.

Chinese e-commerce giant Alibaba has a few holdings in the list of 25 companies. In contrast, other major Chinese tech companies like Xiaomi, Meituan, and Baidu each have stakes in one or two stocks, the analysis found. Also, frequently appearing, typically with smaller stakes, were U.S. asset managers BlackRock and Vanguard.

While Shenzhen-based Tencent is famous for its video games and WeChat messaging app that’s ubiquitous in China, it has also grown into an investing giant.

Tencent’s holdings in listed companies publicly in the previous year that increased by 785.11 billion yuan, over the 160 billion yuan in profit reported for the year, according to the annual report of the company. That’s not including its subsidiaries.

The company itself is the largest listed in Hong Kong by market valuation.

On Saturday, Tencent said the market regulator notified it of “its decision to halt the merger of Huya and Douyu based on the result of its antitrust review.” Both companies are Tencent subsidiaries that listed in the U.S. in the recent three years.

On Tuesday, however, China’s market regulator disclosed it approved Tencent’s deal to privatize U.S.-listed search engine and text-input company Sogou.

For many China start-ups, having a big tech company as a backer often means access to vast amounts of data on consumer preferences.

But the internet industry has also been ruthless. In a 2018 book known as “AI Superpowers, China, Silicon Valley and the New World Order,” Google’s former China head Kai-Fu Lee said the local tech world resembled gladiator fights where nothing was off-limits, from copying innovations to launching smear campaigns.

After losing regulation, China has intensified its crackdown on massive, homegrown tech giants in the last several months.

The regulator, the Cyberspace Administration of China (CAC), also said new user registrations could be suspended in the interim.

Over the weekend, CAC announced that companies with data on more than 1 million users would likely need approval before being listed overseas.

The increased scrutiny on data follows the regulators’ crackdown on tech companies since the previous fall over monopolistic practices, leading to authorities fining Alibaba $2.8 billion.

About Us

We provide the insights on leaders who are responsible for taking their organization to new heights, all the while bringing together a group of talented individuals.

Recent Posts | Make Profit Not Waste | Stephen Pratt

Supply chain leaders, including VPs, often find themselves making bets with unknown financial consequences. Having started with largely infeasible plans generated by deterministic “one-number” planning systems, compounded by unexpected supply or demand disruptions, they are forced into last-minute adjustments to meet operational and financial goals.

Intelichain | Revolutionary Supply Chain Planning Solutions | Roei Aviram

Unsurprisingly, today’s supply chain faces numerous issues, including sustainability, technology, global economic and political instability, talent management, and supply chain resilience. Advanced forecasting algorithms and predictive analytics are used in supply chain management to help organizations of all sizes make better decisions by providing insights into what’s going on in their business at any given moment and predicting future trends.

GAINS | Empowering Companies to Make the Right Decision | Bill Benton

Ensuring the right products are in the right place and at the right time is critical for companies also dealing with supply chain constraints and a high degree of variability. Uncertainty has become the name of the game and the only way to effectively optimize inventory through continuous, data-driven assessments, planning, and decision-making.

Extensiv | Creating the Future of Omnichannel Fulfillment | Sheridan Richey

Food Huggers, a consumer brand that designs products to reduce waste at home, may be in an enviable position now but before they found Extensiv Order Manager, managing booming orders and staying on top of inventory was a huge operational challenge. The business has inventory spread across multiple geographically distributed warehouses, with orders received via multiple sales channels, including Shopify storefronts and Amazon.