In Hong Kong on Friday August 13, 2021, the Hang Seng Tech index of China’s largest internet and ecommerce stocks including Tencent and Alibaba dropped 2.5 per cent after state news agency Xinhua announced the law had been passed and would take effect on November 1.
The report gave little detail on the contents of the law but said it would clarify how sensitive personal data could be processed, require internet platforms to establish “robust personal information protection compliance systems” and stressed that companies “must not excessively collect personal information”. An earlier draft of the law substantially curtailed Chinese companies’ ability to harvest data without users’ consent and imposed fees of up to Rmb50m ($7.7m) or 5 per cent of annual revenue for serious violations. The Hong Kong-traded shares of Alibaba fell more than 3 per cent on Friday after a punishing session in New York overnight.
The Nasdaq Golden Dragon index of large US-listed Chinese stocks closed more than 5 per cent lower on Thursday in New York, dragged down by an almost 7 per cent fall for the ecommerce group founded by Jack Ma. The gauge has fallen almost 10 per cent since Monday, putting it on track for its biggest weekly drop since April.
The sell-off for Chinese tech stocks, brought about by Beijing’s regulatory broadside against industries including gaming and fintech, has taken the index down almost 53 per cent from its peak in February. Chinese companies’ use of data has come to the fore since Beijing’s cyber security agency launched a probe into ride-hailing group Didi Chuxing days after it raised more than $4bn in a New York initial public offering in June.
Other Chinese media reports on Friday indicated that Beijing would broaden its regulatory campaign into new areas. In Hong Kong, healthcare stocks tumbled after the People’s Daily called for greater regulation of prescriptions filled using online platforms. The safety of online prescription drug sales had “become a topic of social concern”, it said. Ping An Healthcare fell 14.5 per cent while Alibaba Health Information Technology dropped more than 13 per cent.
Source: Financial Times news