No escape

Follow Us Get the newsletter

President Xi Jinping's government is sending a message to global investors: Beware of any Chinese tech giant that handles large amounts of data. Beijing moved swiftly over the weekend to block Didi, an Uber-like ride-hailing app, from signing up new users following a national security investigation over serious violations in its collection and use of personal information. The move comes days after Didi raised $4.4 billion in an IPO in New York, the biggest U.S. debut by a China-based company after Alibaba, co-founded by Jack Ma. Lots of questions are now swirling about who knew what and when about the probe. But what's clear is that Beijing is looking for a way to control data collected by private companies, and is willing to shut them down if necessary.  The U.S. listing may have played a role in the timing. While the Biden administration revoked Trump-era bans on Chinese-owned apps TikTok and WeChat last month, it's also conducting a review to clarify what sensitive data shouldn't be accessed by foreign adversaries. China is looking at imposing similar controls, and the Communist Party-backed Global Times said Didi deserved more scrutiny in part because its two largest shareholders are foreign companies. Even more important, however, is China's efforts to create a government-controlled market for data that unleashes its value and propels economic growth over the next few decades. Some projections show China will hold a third of the world's data by 2025, giving it potentially a massive competitive advantage in areas like artificial intelligence. China still hasn't figured out exactly how that will work, which is underpinning the regulatory uncertainty. But it's a sure bet that any solution will first and foremost benefit the party, no matter if private companies or U.S. investors get steamrolled in the process. — Daniel Ten Kate

The Didi application inside a ride-sharing vehicle in Beijing June 11. Photographer: Gilles Sabrie/Bloomberg Click here to follow Bloomberg Politics on Facebook and tell us how we're doing or what we're missing at balancepower@bloomberg.net.

Global Headlines

Oil standoff | The OPEC+ alliance resumes negotiations today on an output accord amid a deepening crisis as arguing between Saudi Arabia and the United Arab Emirates leaves market watchers guessing how much oil will flow into the global economy. The rare spat between the long-time allies has twice halted talks, as oil continues its inflationary surge above $75 a barrel. Iran reiterated that it can boost oil production rapidly if U.S. sanctions are lifted. China dialogue | Xi is expected to hold a video call this week with German Chancellor Angela Merkel and French President Emmanuel Macron, sources say. While the agenda isn't public, the talks may attempt to breathe life into a major Europe-China investment deal reached in December which has since stalled amid allegations of human rights abuses in the Chinese province of Xinjiang and tit-for-tat sanctions. Pandemic claim | President Joe Biden all but announced an end to the pandemic in the U.S. yesterday, celebrating what he called a "heroic" vaccination campaign on America's Independence Day holiday. But he appealed to Americans who haven't been vaccinated to get their shots, saying the country's battle against the virus had been costly with more than 600,000 dead. President Rodrigo Duterte says he has a "win-win" relationship with Beijing, but his critics aren't so sure. Five years after he announced his "separation" from the U.S., most big-ticket projects funded by China have yet to break ground or haven't been approved, with only three under construction. Tensions rise | Former South African President Jacob Zuma won Constitutional Court agreement to consider his application for a review of its decision to jail him for 15 months for contempt. He accused the nation's top court of unfairly convicting him, as supporters gathered at his rural homestead in the eastern KwaZulu-Natal province yesterday, vowing to resist any attempt to arrest him. Zuma supporters gather yesterday at his home in Nkandla. Photographer: Emmanuel Croset/AFP/Getty Images  Tepid result | Japan's ruling coalition fell short of a majority in a Tokyo assembly vote, indicating some fragility for Prime Minister Yoshihide Suga's government as virus numbers rise. The result may prompt Suga to advance plans for more spending ahead of a general election due later this year. What to Watch This Week Top business leaders in France are urging Macron to delay moves to reform the pension system, shortly before he's set to announce whether he'll attempt changes before the 2022 election. Luxembourg Prime Minister Xavier Bettel has been admitted to the hospital after testing positive for Covid-19, days after attending a summit with other European leaders. Chile's process to draft a new constitution got underway yesterday after its start was postponed due to clashes between the police and protesters in downtown Santiago. Indonesia will start importing oxygen cylinders to meet surging demand from Covid-19 patients as infections overwhelm its health system. Thanks to the more than 35 people who responded to our quiz question and congratulations to Eray Erdem, who was the first to name Zuma as the former president who was sentenced to jail for defying a court order to testify at a graft inquiry. And finally ... The hackers behind the latest mass ransomware attack exploited previously unknown vulnerabilities in IT management software made by Miami-based Kaseya, a sign of the skill of the Russia-linked group REvil believed responsible. Stockholm-based TrueSec says its investigations involving multiple victims in Sweden found hackers used a flaw in Kaseya's code to push ransomware to servers that used the software and were connected to the internet.   Computer code displayed on screens in Danbury, U.K. Photographer: Chris Ratcliffe/Bloomberg

Like Balance of Power? Get unlimited access to Bloomberg.com, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. Unsubscribe | Bloomberg.com | Contact Us Bloomberg L.P. 731 Lexington, New York, NY, 10022