For global investors, as Chinese President Xi Jinping tries to control one of China’s most precious resources: big data, the legend of Didi Global Inc. makes China’s largest technology company a riskier bet .

In most respects, Didi is an attractive success story. The company controls almost the entire online car-hailing market in China, and lists SoftBank Group and Tencent Holdings Co., Ltd. as major shareholders. Didi was actually profitable in the first quarter, which is rare in the industry. Last week, its IPO was the IPO of the second largest Chinese company in the United States, and it was widely acclaimed. Didi sold 317 million shares, 10% more than originally planned.

However, the listing on the eve of the 100th anniversary of the founding of the Communist Party did not seem to trigger celebrations in Beijing. On the contrary, two days after the IPO, the Chinese cyberspace regulator stated that it was reviewing the company on national security grounds. Two days later, the regulator stated that the company had serious violations in the collection and use of personal information. It then ordered the company’s app to be removed from the store.

As the US market reopened, the stock plunged 28% in premarket trading on Tuesday.

The reason why Didi is so valuable to investors is the same as it makes it and other technology companies a potential threat to Beijing: It has a large amount of sensitive data from 5 billion active users, most of which are in China. In the past year, the Xi Jinping government has been trying to control these data, not only to protect users from abuse, but also to find a way to use it to stimulate broad economic growth, rather than simply enriching a group of billions that might challenge the Communist Party. The authority of the Millionaire Party.

The Wall Street Journal, citing people familiar with the matter, reported that China’s Cyberspace Administration of China recommended that Didi postpone its IPO a few weeks before its listing to check its cyber security. Regulators are particularly concerned that Didi’s listing in the United States will require Didi to disclose its main suppliers and suppliers, which may make it vulnerable to security breaches. It quoted an unidentified person as saying.

Didi said in an email statement on Monday that it was unaware of the decision by Chinese regulators to suspend user registration and remove Didi Chuxing from the app store before Didi went public.

Like many other Chinese tech giants, Didi has grown rapidly without comprehensive supervision. Beijing is now seeking to plug regulatory loopholes, but it will take more time. By listing in the United States, Didi actually avoided the extensive approval process of China’s securities regulators, at a time when officials have pushed more companies to raise funds domestically.

Lu Xiaomeng, a senior analyst at the political risk consulting firm Eurasia Group, said: “Beijing is not happy to see its champion companies please foreign stakeholders.” “It also hopes that technology companies will use their core assets-data And the algorithm-keep it in China.”

Some forecasts show that by 2025, China will have one-third of the world’s data, which gives it a potentially huge competitive advantage in areas such as artificial intelligence that will promote the development of the modern economy. And geopolitical risks are also high: The Biden administration is reviewing which user data should be prohibited from entering China, and Beijing is also worried about handing over information that might be used by opponents.

As China recovered from the effects of the COVID-19 pandemic and increased tensions with the United States, China accelerated its campaign to impose stricter controls on the country’s technology companies at the end of last year. After the officials cancelled Ant Group’s US$35 billion dual listing in Shanghai and Hong Kong in the 11th hour, they lashed out at the intech industry.

Like Didi, Ant Financial also dominates its field. In just ten years, this company is a subsidiary of Jack Ma’s Alibaba Group. Through its Alipay app and a huge Yu’ebao money market fund, this company has grown and reshaped the lives of millions of Chinese people.

By March, it was clear that the authorities were expanding their offensive. President Xi warned at a meeting of the CCP’s Supreme Financial Advisory Committee that Beijing will hunt down so-called “platform” companies that have accumulated data and market power. The term actually covers a range of companies that provide services to hundreds of millions of people, from Didi to food delivery giant Meituan to e-commerce giants such as JD.com.

The crackdown has put heavy pressure on the technology industry. Alibaba’s Hong Kong-listed stock has fallen 33% since its October high, while Tencent (China’s leader in social media, games and music publishing) has fallen 28% since its record high in January. Didi fell 11% on Friday.

China is not the only country trying to control the dominance of large technology companies. The US Congress is seeking to force companies such as Amazon and Apple to fundamentally change their business models, while Google is facing a full EU investigation into its advertising technology.

Joshua Crabb, Robeco’s senior portfolio manager in Hong Kong, said: “We have entered a new era in the world, and the regulatory review of technology has been strengthened and will continue for some time.”

But the scale and speed of Xi Jinping’s campaign illustrates the Communist Party’s obsession with control. The party is fighting the multiple threats it considers to national security, and its October five-year plan focuses on security issues for the first time. Under the leadership of the Biden administration, competition with the United States will only intensify. The Biden administration has recently convened allies to form a more unified front against Beijing.

The problem is that Chinese entrepreneurs often turn to the U.S. Stock Exchange for help, which provides founders with something they cannot obtain at home. Deep international capital and low barriers to entry mean that the world’s largest market remains the main destination for Chinese and Hong Kong companies, who raised funds at a record speed earlier this year. The potential mandatory delisting of the New York Stock Exchange and stricter NASDAQ requirements have no deterrent effect on Chinese companies that need cash.

Although the Communist Party has little say in the process of listing private companies in the United States, it can often push top managers. But exerting an influence on a company’s operations—just like it did with Didi—is a much bolder move, and it puts the government’s mark on the U.S. stock market.

Chu Chengfeng, co-founder and partner of Plenum, a research company specializing in Chinese politics and economics, said that China’s cyberspace regulators “are trying to step in and exert influence throughout the process.” “They are trying to use Didi to establish an example of how a company goes public in New York.”