Apps in Beijing’s crosshairs as crackdown heats up

FILE PHOTO: Illustration picture of China's Tencent Music Entertainment Group
FILE PHOTO: The logo of China's Tencent Music Entertainment Group is seen next to an earphone in this illustration picture taken March 22, 2021. REUTERS/Florence Lo/Illustration

August 19, 2021

By Stephen Culp

NEW YORK (Reuters) – U.S.-traded shares of several China-based tech-related firms, including Alibaba Holding, Tencent Music Entertainment Group and iQiyi, slid on Thursday in the wake of Beijing’s findings that 43 apps illegally handled user data and directed their parent companies to fix the problem.

Alibaba Holding was last off 6.3%, while Tencent Music Entertainment Group was most recently down 6.9% and video streamer iQiyi had slid 4.0%.

Exchange traded funds IShares China Largecap ETF and iShares MSCI China ETF were down 1.6% and 2.1%, respectively.

The action by China’s Ministry of Industry and Information Technology (MIT) was the latest move in a months-long Chinese regulatory crackdown, which has affected e-commerce, gaming, ride-hailing apps, cryptocurrencies and other sectors.

On Tuesday, Beijing’s anti-trust regulator introduced sweeping draft rules targeting data-rich firms in a move to tighten its control over its technology sector.

Looking ahead, investors anticipate the possibility of reforms affecting the healthcare sector, as well as stringent new data security laws.

(Reporting by Stephen Culp; Editing by Chizu Nomiyama)