45 days for a forced sale . . .
U.S. President Donald Trump issued executive orders on Thursday banning TikTok and WeChat in the U.S. in 45 days unless their U.S. operations are sold by their Chinese owners (see earlier Asia Watch analysis of Trump’s TikTok ban here). WeChat is a popular Chinese social networking app owned by Chinese multi-national Tencent. The app, with approximately 1.2 billion users worldwide, is used for messaging, e-payments, banking, ride-hailing, and e-commerce. Citing concerns over the Chinese Communist Party’s access to personal and proprietary information, as well as its function as a tool of censorship, the executive order frames the WeChat ban as protecting U.S. national security. The decision follows Secretary of State Pompeo’s announcement to expand the ‘Clean Network Program,’ the broader U.S. strategy on Chinese technology.
In recent years, critics have raised concerns over Tencent’s handling of user data and its alleged complicity in enforcing Beijing’s censorship. Trump’s WeChat executive order, however, is widely regarded as a poorly-devised distraction from his domestic troubles that will have negative commercial and people-to-people implications. Tencent has stakes in several U.S. videogame companies, whose futures may be jeopardized by the ban. Also, iPhone sales in China – where 20 per cent of Apple’s total revenues originate – could be undermined by the ban of an app the Chinese deem critical, should WeChat not be made available on iTunes. The WeChat ban would also cut what is virtually the only free medium of communication for people who have loved ones in China, where competing messenger apps, including WhatsApp and Facebook, are banned.
Implications for Canada?
While the executive order is vague, and it is too early to determine specific implications for Canada, joining the campaign to ban WeChat could severely restrict communications options for Canadians and Chinese in Canada with friends, family, and colleagues in China. Commercial ties could also be compromised. The Canadian Pension Plan Investment Board, for instance, is one of Tencent’s largest shareholders with a C$2.71-billion investment in the firm.