New York (CNN Business)President Donald Trump wants to ban WeChat, dramatically escalating tensions with China. But what is WeChat, and why is it so controversial?
The popular Chinese messaging app is used across the Chinese diaspora but may be unfamiliar outside of those circles.
So what is it?
WeChat, called Weixin in China, functions like Facebook (FB), LinkedIn, Uber, Instagram and several other apps all at once. For many Chinese people, WeChat is an indispensable app for staying in touch across the world.
Some of that success has been aided by the government. China blocked many American apps including Facebook, Google and Twitter (TWTR), so state-sponsored apps have become the norm.
WeChat is owned by Tencent (TCEHY), China’s biggest tech company and the world’s largest gaming company. In March, Tencent reported that WeChat has nearly 1.2 billion monthly active users. The company does not disclose user numbers by country, but industry analysts say the vast majority of them are in China.
The app has been subsidized by the Chinese government since its creation in 2011.
What can you do on WeChat?
WeChat has a lot more functionality in China than it does in the United States. While in America, you can hail a cab, play mini games, post to your “story” and send money.
By comparison in China, where stores regularly accept WeChat Pay as a form of payment and QR codes are all over cities, the sky’s the limit. Inside WeChat, you can pay bills, check out restaurant menus, find local hangouts, book doctor appointments, reach out to new business contacts, file police reports, read the news and access bank services.
What does Trump want to do?
President Donald Trump issued executive orders late Thursday night that would ban WeChat and TikTok, the short-form video app owned by Beijing-based ByteDance, from operating in the United States in 45 days if they are not sold by their parent companies.
According to the order, a ban would apply to “any transaction that is related to WeChat” made by any person or “any property” subject to the jurisdiction of the United States.
I heard Trump wanted to ban TikTok, but why now WeChat?
Trump wrote in his executive order, “Like TikTok, WeChat automatically captures vast swaths of information from its users. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information.”
He continued, “The United States must take aggressive action against the owner of WeChat to protect our national security.”
WeChat has a reputation for being heavily monitored. That’s despite Tencent’s attempts to convince users to “rest assured, respecting user privacy has always been one of WeChat’s most important principles,” as the company wrote in a 2018 blog post.
In an 2016 Amnesty International report on user privacy, Tencent scored a zero out of 100 for WeChat’s lack of freedom of speech protection and lack of end-to-end encryption. Tencent doesn’t disclose when the Chinese government requests user data and gives no detail about the kind of encryption, if any, it employs.
Who would the ban affect?
The hit to Tencent so far would be mostly symbolic, given the small market share WeChat has in the United States. But if it expands into gaming apps, a massive part of the company’s business, that could be a big problem.
Tencent owns Riot Games, the maker of the world’s biggest PC game “League of Legends,” and has a stake in Epic Games, parent company of “Fortnite.” It also has a huge mobile games business and is working with the Pokémon Company to make what looks to be a cross between “Pokémon” and “League of Legends,” called “Pokémon Unite.” The game was announced in June and has no release date yet. It would arrive on Nintendo Switch and mobile.
Tencent has dealt with government restrictions before, when the Chinese government stopped approving new games for nine months in 2018. Tencent stock lost 25% of its value in that the time period.
How are WeChat and China responding?
China’s Ministry of Foreign Affairs on Friday said it “firmly opposes” the executive orders targeting WeChat and TikTok.
“The United States is using national security as an excuse and using state power to oppress non-American businesses,” ministry spokesperson Wang Wenbin said during a daily press briefing, accusing the United States of “political manipulation and oppression.”
A Tencent spokesperson said the company “is reviewing the executive order to get a full understanding.”
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