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Alibaba (BABA), JD.com (JD), and Pinduoduo (PDD) Slip as China Ramps Up Supervision of Offshore Listed Companies

July 6, 2021 9:33 AM

Shares of major Chinese companies listed in the United States are down after Beijing announced plans to step up supervision of Chinese firms listed offshore.

Pinduoduo (NASDAQ: PDD) share price is down over 4% in pre-open Tuesday, while shares of Alibaba (NYSE: BABA) and JD.com (NASDAQ: JD) are down 1% and 2.6%, respectively.

The government said it will work to improve its regulation of cross-border data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuance, market manipulation and insider trading, Reuters reports.

Today’s move comes only two days after the Cyberspace Administration of China (CAC) banned app stores in China from offering the Didi app. The largest ride-sharing company in China went public last week in a blockbuster IPO.

"After checks and verification, the Didi Chuxing app was found to be in serious violation of regulations in its collection and use of personal information,” CAC said in a press release.

The ban is likely to have a profound impact on Didi’s sales as new users won’t be able to register.

"The company will strive to rectify any problems, improve its risk prevention awareness and technological capabilities, protect users' privacy and data security, and continue to provide secure and convenient services to its users," Didi said in a statement.

Shares of Didi (NYSE: DIDI) are down almost 23% in early Tuesday as US investors digest news from China.

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