Trumps WeChat Ban a Warning Shot to Chinese Tech Firms: Expert

WeChat and TikTok will likely feel the brunt of more regulation after U.S. President Donald Trump signed off on two executive orders banning transactions with the Chinese-backed apps.

On Aug. 6, the president signed the two orders barring U.S. citizens and entities (government and businesses) from conducting commercial transactions with the parent companies of both apps, ByteDance and Tencent Holdings.

The bans will take effect 45 days from Aug. 6 and has already sent the share price of WeChats parent company Tencent on a downward trend.

Tencent is a major Shenzhen-based digital conglomerate with extensive ownership stakes in 480 different businesses and entities globally. It has stakes in well-known businesses including Epic Games, Activision Blizzard, Reddit, and Atomwise as well as Australian companies Afterpay, and Airwallex.

Epoch Times Photo
Epoch Times Photo
Game enthusiasts and industry personnel attend the Epic Games Fortnite E3 Tournament at the Banc of California Stadium on June 12, 2018 in Los Angeles, California. (Christian Petersen/Getty Images)

In recent times, Chinese-backed tech firms, including Tencent, Zoom, and Huawei, have come under increased scrutiny due to security and privacy concerns over their products.

These concerns stem from Beijings 2017 National Intelligence Law that compels China-based companies to share data with the regime if needed.

Michael Shoebridge of the Australian Strategic Policy Institute told The Epoch Times on Aug. 11 that the executive orders from Trump will “heighten scrutiny” around WeChat globally, but more importantly, is a sign that scepticism around Chinese-backed tech will escalate.

“This is a step on from the 5G debate,” he said.

“It may be the start of strategic competition coming to e-commerce, with a recognition by policymakers that the growth of particular digital platforms can provide a way for governments [such as Beijing] to obtain data and conduct cyber operations,” he added.

Epoch Times Photo
Epoch Times Photo
Tencent booth at Sportel Asia Conference on March 15, 2016, in Singapore. (Sean Lee/Getty Images for Sportel)

The ubiquity of WeChats services and strong evidence of censorship on the platform, means the service will remain a threat to national security:

“WeChat is more than a social media messaging application, it is also a large e-commerce platform with reach not just in China, but into southeast Asia, and growing internationally,” Shoebridge pointed out.

“Chinese regulation of the platform and its operations inside China is strong, and it is hard to disentangle these operations from its global operations,” he continued.

Matt Warren, professor of cybersecurity at the Royal Melbourne Institute of Technology told The Epoch Times on Aug. 11 that the ban would have a limited impact on WeChats current incarnation with most of its userbase located in Asia.

However, he believed it would “impact any future plans of growing beyond their Chinese focus.”

For example on June 29, the Indian government made headlines by outright banning 59 Chinese-backed apps from the country.

Epoch Times Photo
Epoch Times Photo
Members of the City Youth Organisation hold posters with the logos of Chinese apps in support of the Indian government for banning the wildly popular video-sharing Tik Tok app, in Hyderabad on June 30, 2020. (Noah Seelam/AFP via Getty Images)

“The ban impacted 300 million Indian users who were using these Chinese apps including WeChat,” Warren said noting that the ban effectively stymies WeChats ambitions in its largest overseas market.

“It is likely that the United States will follow India with new regulations, and Australia will wait to see what happens before they take any action,” he addeRead More – Source