Chinese tech giants sink on report China is considering a state-backed company to oversee tech data

• China is continuing its crack down on tech companies, putting pressure on their US-listed stocks.
• The People's Bank of China is considering a state-backed company to oversee tech data collection.
• Reports from Bloomberg say tech companies may be forced into a joint venture with the PBOC.

Chinese tech giants fell on Wednesday after a report out of Bloomberg said the Chinese government is considering a state-backed company to oversee tech company's data collection.

Shares of Alibaba, JD.com, VIPShop, Tencent, Pinduoduo, and Meituan all fell on the day. Streaming and music stocks from China like Tencent Music Entertainment and IQIYI were especially hurt, falling roughly 18% and 20%, respectively.

According to unnamed sources that spoke to Bloomberg, China's government and the People's Bank of China have proposed establishing a joint venture with local technology giants to oversee the lucrative data they collect from citizens.

The plan is an escalation of regulators' recent attempts to control data collection in the country's tech sector. The details of the proposed joint venture have yet to be released to the public.

The joint venture announcement from Chinese regulators comes amid a crackdown on large tech companies in the nation.

In January, the Communist Party Central Committee and the State Council laid out a 51-point plan to regulate consumer data use, enforce anti-trust policies, and curb the influence of tech companies.

Then, earlier this month in a government report outlining the Communist Party's top priorities for the next five years, tech companies were encouraged to open up their data in order to promote the healthy development of online economies, per Bloomberg.

President Xi JinPing, in a meeting of the communist party's top financial advisory and coordination committee, followed the five-year plan with a warning on March 15 that his government would go after so-called "platform" companies.

JinPing said these companies have amassed increasing power by securing the data of hundreds of millions of Chinese consumers, in a statement relayed by state-backed broadcaster CCTV.

"Some platform companies are developing in non-standardized ways and that presents risks," CCTV said, citing Xi JinPing in the meeting. "It is necessary to accelerate the improvement of laws governing platform economies in order to fill in gaps and loopholes in a timely fashion."

Exchange-traded funds that track Chinese equities like iShares MSCI China ETF and the SPDR S&P China ETF dropped nearly 4% on Wednesday after the news of further regulation broke.