China Strengthens Data Regulations with Launch of 'Strong Nation' App

China is planning to launch a government-backed app that will integrate a variety of services, including ride-hailing. This is a sign of more state involvement in a sector that has been wracked by controversy.

Strong Nation Transport, a new app, will soon be available to government and state enterprise employees, according to the Beijing Daily. The app will offer users a variety of mobility options from car-sharing services and freight forwarders to railway operators.

It is unclear whether the app will become more widely available, or if it will eventually include Didi Global Inc.'s Chuxing service, which is by far the country's dominant ride-hailing platform. Beijing is concerned about the large amount of data that mobile app operators like Didi are collecting, including online activity and the movements of individuals and government officials. This concern was a key factor in the government's decision to investigate Didi in 2021 and establish a nationwide framework to control the flow of sensitive information.

This week, Didi secured the green light to resume signing up new users, suggesting that the worst is over for a ride-hailing giant that symbolized Beijing's bruising campaign to rein in its powerful internet industry. However, many of its apps - which were wiped from mobile stores at the start of the investigation - have yet to reappear.

The team behind the project has vowed to protect users' data security and privacy, the Beijing Daily reported. The aim is to help resolve issues of data security as well as "disorderly expansion" in the ride-hailing industry, a term Xi Jinping's administration has often used to signal the need to rein in increasingly powerful internet giants.

However, later reports from prominent news outlets cited the transport ministry as well as Xuexi Qiangguo - the team behind a separate propaganda app - as downplaying the significance of the app. According to Xuexi Qiangguo's online post, the app was never intended to be a national-level mobility platform, but was simply a collaboration with an affiliate of the ministry.

The unexpected move could create more uncertainty around Beijing's pledge to liberalize its internet sector after a sweeping crackdown launched in 2021 that effectively hobbled the main players in sectors from ride-hailing and e-commerce to social media and gaming. The government, keen to resuscitate an economy devastated by years of Covid controls, has granted more freedom to firms such as Tencent Holdings Ltd. in arenas like gaming.

But Beijing has also tightened regulations in other sectors and continued to take so-called "golden shares" in units of major internet giants including Alibaba Group Holding Ltd. This gives the government a direct interest in key tech companies and suggests that it is putting in place mechanisms to ensure longer-term oversight.