WASHINGTON (Reuters) – US President Donald Trump announces reduced bans on US transactions with Chinese owners of WeChat messaging app and TikTok video sharing, an increase facing high-stakes in Beijing on the future of the global tech industry.
The messenger app WeChat and short-video app TikTok can be seen near the Chinese and US flags in this photo taken on August 7, 2020. REUTERS / Florence Lo / Illustration
Executive orders were announced on Thursday and effective 45 days to come after the Trump administration this week flagged higher efforts to clean up “untrusted”
; Chinese apps from digital networks. US, calling Tencent Holdings Ltd’s (0700.HK) The popular TikTok of WeChat and Bytedance is a “significant threat.”
TikTok has come under fire from U.S. lawmakers about national security concerns surrounding data collection as mistrust grows between Washington and Beijing. Reuters reported on Sunday that Trump gave Microsoft Corp (MSFT.O) 45 days to complete the purchase of the US operation of TikTok.
The ban on US transactions with Tencent, one of the largest internet companies in the world, illustrates further fracturing of the global internet and the breakdown of long-standing relations between tech industries in the United States and China.
“This is the rupture in the digital world between the US and China,” said James Lewis, a technology expert with the Washington-based Center for Strategic and International Studies. “Absolutely, China will be rewarded.”
On Wednesday, US Secretary of State Mike Pompeo expanded a program called the “Clean Network” to prevent various Chinese apps and telecoms firms from accessing sensitive information to citizens and US business.
Trump’s new orders appear to be linked to Pompeo’s announcement, Lewis said.
“We are reviewing the executive order to get a full understanding,” a Tencent spokesman said.
ByteDance declined to comment.
WeChat has been downloaded relatively small 19 million times in the United States, showing data from Sensor Tower. In China, however, the app is largely as a medium for services that differ as games and payments. It is also a common platform to communicate with individuals and businesses outside of China.
US social media and messaging services such as Facebook Inc’s (FB.O) WhatsApp and Messenger have been blocked in China, where a “good firewall” prevents citizens from freely accessing the world, and where online communication is regularly monitored and censored.
Washington’s concerns about China’s tech industry have only recently focused on telecom equipment vendors Huawei Technologies Co Ltd. While the relations came from a host of economic and human rights issues, it punished many other tech companies.
Tencent is the biggest target. It is the second most important company in Asia after Alibaba Group Holding Ltd (BABA.N) with a market capitalization of $ 686 billion, and is among the largest social media and video game companies in the world. It opened a California gaming studio earlier this summer and owns minority stakes at many gaming and internet firms around the world, including United States app messaging operator Snap Inc (SNAP.N).
Trump’s order sent Asian stock markets lower on Friday, with Tencent shares up 10.1% before recovering some of its afternoon trading losses.
The yuan CNH =, a barometer of Sino-US relations, posted its more severe collapse since the United States expelled China from the Houston consulate a little over two weeks ago.
Trump issued orders under the International Emergency Economic Powers Act, a law that provides the executive power to prevent U.S. companies or citizens from trading or conducting financial transactions in penalties.
Commercial Secretary Wilbur Ross will recognize the transactions covered after the orders take effect in mid-September.
Tensions have been raging between the two powers for months, with the issue of the United States handling China over the novel coronavirus uprising and moving to block Hong Kong freedoms. The growing aggressive posture towards Beijing comes as Trump bids for re-election in November.
Trump said this week that he would support Microsoft’s efforts to buy the US operation of TikTok if the US government has a “large share” of the proceeds. However, he said he would ban the popular app on September 15, even though some Republicans raised concerns about the potential political collapse.
The app could be used for disinformation campaigns that benefit the Chinese Communist Party, and the United States “should take aggressive action against TikTok owners to protect our national security,” Trump told a order.
On the other hand, Trump said WeChat “automatically captures vast swaths of information from its users. This collection of data threatens to allow the Chinese Communist Party access to personal and proprietary American information. ”
The United States is not alone in worrying about Chinese internet applications: WeChat and TikTok are among the 59 most Chinese apps banned by India in June for threatening “sovereignty and integrity” .
The WeChat command effectively bans the app in the United States by prohibiting “the extent permitted under applicable law, any transaction related to WeChat by any person, or in respect of any property, covered by jurisdiction of the United States. to Tencent Holdings Ltd. ”
It is unclear whether the penalty will affect Tencent’s other handling of the country.
Meanwhile, WeChat users in the United States are quickly reviewing alternatives.
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“The ban on WeChat violates American liberal rules,” Jeason Ma, a 33-year-old in Los Angeles who obtained U.S. citizenship in November, told Reuters. “Most of our family and friends are in China. It will cause significant inconvenience to our lives.”
Ma shared her account information for WhatsApp and messaging with rival Line Corp (3938.T) with friends and family, afraid he will lose access to WeChat.
The order “calls TikTok a national security threat,” said Derek Scissors, a Sino-US economic relations expert at the American Enterprise Institute’s think tank. “Either we have not missed the threat in three years or it has become another but we are waiting for 45 days.”
Reporting by David Shepardson and Alexandra Alper; Additional Reporting by Mohammad Zargham, Echo Wang, Nandita Bose, David Shepardson, Jane Lee, Colin Qian and Tom Westbrook; Writing by Jonathan Weber; Editing by Muralikumar Anantharaman and Christopher Cushing
Our Standard:The Principles of the Thomson Reuters Trust.
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