The Real Lesson of Didi Global’s Stock Drop

For a brief moment last week, it looked like Chinese ride-hailing firm Didi Global was going to get away with a more successful IPO than that of its U.S. counterparts Uber and Lyft two years ago. That was until the Chinese government, with a weekend edict about data security, reminded the company who’s really in charge, lopping 20% off the value of Didi shares today. And to reinforce the message, China today announced new rules governing the overseas listings of Chinese companies, which could affect future plans for TikTok’s owner Bytedance and others likely to go public

It might not feel like it, but the government is doing Americans a favor, reminding them of a reality that is easy to gloss over. China is a communist country, which is inherently in conflict with the idea of successful private companies. Shareholders in Didi, for instance, can never be sure the government won’t one day put Didi out of business—or at least, render their shares worthless.