China's cyberspace watchdog has ordered a crackdown on what it calls "hazards to national security" on social media websites in an effort to tighten controls on the spread of news ahead of the country's Communist Party Congress later this year.
The move, which was unveiled Friday by the Cyberspace Administration of China, sent shares in some of the country's biggest tech companies sharply lower as investors fretted about the potential for harsh penalties against firms such as Baidu Inc. (BIDU) , Tencent Holdings Group (TCEHY) and Weibo Corp. (WB)
"Users are spreading violence, terror, false rumours, pornography and other hazards to national security, public safety, social order," the Administration said on its website in what is widely perceived as a shot across the bow of WeChat, China's most-popular messaging app, and its 940 million monthly active users.
Tencent Holdings shares were marked 3.55% in Hong Kong Friday and changing hands at a one-week low of HK$315 each by the close of trading. Weibo Corp's ADRs closed at $82.20 in New York Thursday but were marked 0.85% lower in after hours trading while Baidu Inc's ADRs closed at $222.57 each.
China adopted a series of new cyber security laws earlier this year, most of much took effect in June, that gives the government sweeping powers of the country's nearly 750 million daily internet users.
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