Back in 2015, when China’s love affair with its internet sector was in full bloom, there were few startups the country’s rulers were more passionate about than Didi Global.
At an internet conference that year in the scenic canal city of Wuzhen, President Xi Jinping sought out Didi’s cherubic-faced founder, Cheng Wei, whose ride-hailing app was in a brutal street fight with Uber for market share. Cheng showed Xi a screen that used cutting-edge data tools to monitor the real-time flows of Didi passenger traffic in China’s largest cities and told Xi that his business had expanded despite competition from “U.S. rivals,” Chinese state media reported.
Six years later, Xi’s embrace of Didi has turned into a headlock. In early July, shortly after Didi went public in New York, Xi’s government launched a cybersecurity investigation into the company and removed its mobile app from Chinese app stores, saying it violated data privacy laws. This crippled Didi’s user growth. Despite having received mixed signals from the government about the initial public offering, Cheng and other Didi executives had decided to plow ahead with it, a risky gamble that ended up costing them dearly.
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