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Why a giant Chinese group withdrew from the New York Stock Exchange?

The Chinese group Didi Chuqing, which is equivalent to Uber in China, announced in a brief statement that it will withdraw today from the New York Stock Exchange, which it has joined since the summer, in light of the intensification of competition between Beijing and Washington in the technology sector.

The group said in its statement, “After careful consideration, it has started the process of withdrawing from the New York Stock Exchange with immediate effect, and has begun preparations for an IPO on the Hong Kong Stock Exchange.”

This constitutes a severe blow to shareholders, as the company lost, within five months, in the New York market, about 45% of its value.

In 2014, the e-commerce giant Alibaba Group launched its largest initial public offering on Wall Street, raising $25 billion.

But in light of the escalating confrontation with Washington, especially in the technology sector, Beijing is now encouraging Chinese start-ups to raise funds on its exchanges, ie in Hong Kong, Shanghai, Shenzhen or Beijing.

Unlike many other Chinese companies, Didi kept its IPO process in the United States at the end of June. The group, which dominates the taxi-booking market in her country, has raised about $4.4 billion.

But the operation has dismayed Beijing, which fears the transmission of sensitive data to the United States. The Chinese authorities have opened an administrative investigation against Didi, linked to her collection of private data. The Chinese authorities also blocked the download of the company’s application, in an unprecedented measure against a large group of technology.

As a result, Angela Chang, a specialist in Chinese law at the University of Hong Kong, said that this decision “is not surprising, after the difficult lesson that the Chinese authorities have taught the company, regarding market control.” “Now all Chinese technology companies will take data security seriously,” she added.

The company’s decision came hours after the United States adopted rules that impose stricter restrictions on foreign companies listed on the stock exchange. The US Financial Market Regulatory Authority, known as the “Securities and Exchange Commission”, is now authorized to write off groups whose accounts are not subject to auditing by an approved company, and Chinese and Hong Kong companies are among the companies that are not subject to this procedure.

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