BEIJING – The Chinese authorities are set to allow Didi Global’s ride-hailing and other apps back on domestic app stores as soon as next week, five sources told Reuters, in yet another signal that Beijing’s two-year regulatory crackdown on the technology sector is ending.

Didi has been awaiting the authorities’ approval to resume new user registrations and downloads of its 25 banned apps in China as a key step to resuming normal business since its regulatory troubles started in mid-2021.

The lifting of the new user ban and app resumption for its flagship ride-hailing services and other business could take place before the Chinese New Year, which begins on Jan 22, said four of the sources.

The one-week-long holiday period in China would help Didi start to attract new clients for the business and work towards bringing it back to normal, added two of the sources.

A lifting of the ban on Didi apps could come as Chinese policymakers seek to restore private sector confidence and count on the technology industry to help spur economic activity that has been ravaged by the Covid-19 pandemic.

China’s central bank will step up support for private companies as part of steps to shore up the economy, while easing a crackdown on tech companies, Mr Guo Shuqing, Communist Party chief of the People’s Bank of China, told state-owned CCTV on Sunday.

A restoration of apps would also signal Didi’s completion of its 1½-year-long regulatory-driven revamp.

It will also come after the powerful cyber watchdog Cyberspace Administration of China (CAC) imposed a US$1.2 billion (S$1.6 billion) fine on the company last July.

The fine, which Didi paid in 2022, was the largest regulatory penalty imposed on a Chinese tech company since Alibaba Group and Meituan were in 2021 fined US$2.75 billion and US$527 million, respectively, by the antitrust regulator State Administration for Market Regulation, said two of the sources.

The penalty on Didi was part of Beijing’s sweeping and unprecedented crackdown on the country’s technology titans over the past two years that has sliced hundreds of billions of dollars off their values and shrunk revenues and profits.

Chinese regulators, led by the CAC, have in recent weeks pushed forward with Didi’s app resumption approval process, said two of the sources and another source with knowledge of the matter.

The regulators, who last week submitted a report on the matter to the top party leaders, look to formally get the nod from the leaders in the next few days, two of the sources added.

Regulatory woes

Didi, launched in Beijing in 2012 and backed by prominent investors such as Alibaba, Tencent and SoftBank Group, ran afoul of the CAC when in 2021 it pressed ahead with its United States stock listing against the CAC’s will.

That move triggered regulatory woes for Didi, with its 25 mobile apps ordered to be taken down from app stores, registration of new users suspended, and the fine imposed over data security breaches.

Didi was also forced to end its 11-month-long journey as a New York Stock Exchange-traded company in June 2022, turning it from a poster child of China’s Internet boom to one of the biggest casualties of Beijing’s regulatory crackdown.

The company previously hoped the US delisting and a hefty penalty would put to rest its regulatory woes and had expected to relaunch the apps last September after updating them to ensure they were compliant, two sources have said.

However, the return of Didi’s banned apps was delayed amid China’s ruling Communist Party’s twice-a-decade congress and central leadership reshuffle last November and Covid-19 outbreaks in many cities across the country after Beijing abruptly lifted tough virus curbs in late 2022.

The delay in the return of the apps cast a shadow over Didi’s business plans.

Reuters reported last June that Didi was in advanced talks with state-backed Sinomach Automobile to buy a third of its electric vehicle unit in a bid to cushion the impact of the pandemic on its core ride-hailing business.

That deal is primarily subject to the apps’ resumption, said the two sources.

Didi has also been hit badly by regulatory woes which chipped away at its dominance and allowed rival ride-hailing services operated by automakers Geely and SAIC Motor to gain market share across the country. REUTERS