Daily Tech Roundup: Didi Quashes Hong Kong IPO Rumors, TikTok Challenges U.S. Over Secret Briefings

The Daily Tech Roundup offers an overview of significant technology news from China and Asia. [para. 1]

**Didi Quashes Hong Kong IPO Rumors**

Didi Global Inc., a dominant player in China's ride-hailing market, has denied speculations about a potential IPO in Hong Kong next year. The company emphasized that it has no immediate plans for such a move and is concentrating on its core operations, which include catering to passengers, drivers, and partners. According to a statement made to Caixin on Tuesday, Didi is maintaining regular communication with its investors to update them on business progress. Didi's journey with a public listing has been fraught with challenges. After its debut on the New York Stock Exchange in June 2021, the company faced an investigation initiated by the Cyberspace Administration of China, citing national security concerns. This probe, which began just two days after the listing, caused a significant drop in Didi's stock value and ultimately led to its delisting. [para. 2][para. 3][para. 4]

**TikTok Challenges U.S. Divest-or-Ban Law Over Secret Briefings**

ByteDance Ltd., the Chinese parent company of TikTok, is attempting to overturn a newly enacted U.S. law that seeks to ban the app unless it divests. ByteDance argues that the law was passed based on secret briefings that remain classified. By Thursday, the company must present its reasons for initiating the lawsuit. Central to ByteDance's argument is the claim that Congress has failed to provide public proof of any national security threats justifying a ban. The company warns that such a ban would infringe upon the free speech rights of TikTok’s 170 million U.S. users. ByteDance describes the concerns cited by U.S. lawmakers as "hypothetical" and insufficient for overriding First Amendment rights. This high-stakes case could potentially reach the U.S. Supreme Court, which has historically leaned towards supporting free speech. [para. 5][para. 6][para. 7]

**In-Depth: Alipay and WeChat Pay’s Smaller Peers Struggle Amid New Crackdown**

Smaller nonbank payment service providers (PSPs) in China have struggled to compete against industry giants Alipay and WeChat Pay. In their efforts to stay afloat, many resorted to a controversial practice known as "code stacking" to inflate their profits. However, a regulatory crackdown on this and other malpractices has forced these smaller PSPs to adopt new, compliant, and profitable business models. The tougher regulatory environment and the significant market dominance of Alipay and WeChat Pay have led to a sharp decline in the number of these smaller PSPs—from 270 in 2015 to 179 as of the most recent data. The practice of "code stacking" involves underreporting transaction processing fees to banks and payment settlement institutions, which is now being heavily regulated. [para. 8][para. 9][para. 10]

**Tesla Gets License to Test Full Self-Driving in Shanghai**

Tesla Inc. has advanced towards launching its Full Self-Driving (FSD) system in China by obtaining a road test license from Shanghai authorities. Reports indicate that Tesla may have already begun testing the system, following approval to test ten vehicles equipped with its most advanced autonomous driving software in the city's Lingang area. However, Tesla's China unit has not confirmed this development. [para. 11][para. 12][para. 13]

**China Rolls Out New Rules for Online Sites to Curb Cyberbullying**

Chinese authorities have introduced new regulations requiring online information service providers to take primary responsibility for managing online content to prevent cyberbullying. Effective from August 1, the rules were issued jointly by several governmental bodies, including the Cyberspace Administration of China and the Ministry of Public Security. The regulations are part of a broader effort to curb cyberbullying, particularly following severe incidents that have led to victims committing suicide. Last year, China's highest judicial and law enforcement authorities released guidelines to toughen penalties against online abuse. [para. 14][para. 15][para. 16]