Scaramucci says Didi is brutally repelling an attack on capitalism, a form of political terrorism, in China

Hedge fund founder Anthony Scaramucci told CNBC on Wednesday that the Chinese government’s crackdown on Didi Global, just days after the driving giant was made public in the US, is “a direct attack on global capitalism.”

“The bad news for the Chinese and the United States right now is that if you’re a capital spreader in the United States, the risk premium in China has just increased dramatically,” SkyBridge founder and co-manager said on “Squawk Doos.”

Scaramucci’s comments came a day after Didi’s shares plunged more than 19% as Wall Street processed a series of regulatory investigations and restrictions the company faced. The stock fell another 5% on Wednesday afternoon, trading below $12 a share when the company’s main app was removed from Tencent’s WeChat messaging service and Ant Group’s Alipay for new users.

“Ultimately, if there were smart American businessmen advising the Chinese leadership, they would say, ‘This is a direct attack on global capitalism; it’s a form of political terrorism, and you’re hurting the country,'” he said. Scaramucci.

• On Friday, just two days after Didi began trading on the New York Stock Exchange, Chinese regulators announced a cybersecurity investigation of the ride-hailing company and banned new users from signing up while the investigation was underway. That caused the stock to close 5.3% on Friday.
• According to Reuters, China’s cyber regulator said on Sunday it had told app stores to stop carrying Didi’s app completely after alleging the company had illegally collected users’ personal data. In response, Didi said it plans to make changes to comply with the country’s data rules.
• Those developments were followed Monday by a report in The Wall Street Journal, which said weeks before Didi’s public listing was completed, Chinese regulators suggested Didi roll back his IPO plans and conduct a review of his security network.

“The bottom line is that they didn’t want Didi to go public. The regulators asked for an extension. That’s an absolute no-no in a place like China. The moment they disobeyed … then all the repression comes from China to sleep,” Scaramucci said.

According to the Journal’s report, government officials in China were concerned that Didi’s large amounts of user data would come into foreign possession due to the company’s listing on a US stock exchange, which entails stricter disclosure requirements.

“There is an uncertainty going on within China in terms of their ability to control information and the outcome of this will be very bad for companies,” Scaramucci said.

American companies and investors have looked to China, home to the world’s second largest economy, for opportunity despite the far-reaching influence of the Chinese Communist Party on business matters.

However, Scaramucci, who briefly served as White House communications director in the Trump administration, which has taken an aggressive stance against Beijing, said the Didi debacle will not deter companies and investors from China in any significant way.

“The opportunity cost is a bit too high for a hedge fund advisor like SkyBridge, but I still see other companies going to China,” Scaramucci said. “But I have to tell you, we need to give a big boost to what’s going on because it’s an attack on capitalism. It’s nationalism related to centralized control of data and it’s pretty much all that the spirit of what goes on in a capitalist society.”