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Tencent, ByteDance, and others ordered by China to curb financial firms

In a statement Thursday, the People’s Bank of China said it had summoned 13 companies, including Tencent (TCEHY), (JD), ByteDance, Meituan and Didi Chuxing, for interviews also attended by the China Banking Regulatory Commission, the China Securities Regulatory Commission and the State Administration of Foreign Exchange.

The agenda included broad “issues that are common in the current financial activities of Internet companies,” according to the central bank.

Regulators have made seven demands, starting with the requirement that “all financial activities be included in financial supervision, and financial firms must be allowed to operate.” The way tech companies run their financial units is expected to become more “standardized,” the central bank added, and in some cases should force them to apply for the establishment of financial holding companies.

Earlier this month, Chinese regulators imposed similar restrictions on Ant Group, the Ali Baba (BABA) affiliate who owns the very popular Alipay application. Ant was ordered to radically overhaul its operations and become a central bank supervised financial holding company.
This week’s ruling indicates that Beijing is determined to expand the scope of the crackdown. Tencent, for example, runs WeChat Pay, the mobile payment platform tied to its ubiquitous flagship messaging app. At the end of 2018, according to the latest publicly available data, WeChat Pay had more than 800 million monthly active users worldwide, according to the company.

Tencent stock fell 1.6% in Hong Kong on Friday.

In its statement, the People’s Bank of China said companies should also “disconnect the inappropriate links between payment services and other financial products, strictly control the expansion of non-bank payment accounts into the public domain, improve the transparency of transactions and correcting unfair competition “. “

Tencent declined to comment on the meeting, while, Didi and Meituan did not immediately respond to a request for comment.

It was the second such meeting in just three weeks for China’s tech industry A-list, which was summoned by the country’s powerful regulators for looking into antitrust behavior just days after Alibaba was fined a record $ 2.8 billion for acting as a monopoly.

The State Administration for Market Regulation (SAMR), along with the Cyberspace Administration and the State Tax Administration, met with executives from 34 internet companies, including Alibaba, Tencent and ByteDance, to discuss urge to heed the warning of the Alibaba affair and to stop anti-competitive and other illegal behavior, SAMR said in a statement earlier this month.

– Laura He and CNN’s Beijing office contributed to this report.


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