According to Trump, the WeChat app “automatically captures massive amounts of information from its users.” According to him, this threatens the Chinese Communist Party to gain access to personal information of Americans. WeChat was released in 2011. Users can order everything from music, play games to make an appointment with the doctor via the app. Buying airline tickets or ordering a taxi is also possible.
Tencent shares plummeted on the Hong Kong stock exchange in response to Trump’s move. No less than 46 billion dollars of the stock market value of the group evaporated. Before the blow, Tencent was still worth $ 686 billion. This also has consequences for the tech investor Prosus, which is listed on the Amsterdam stock exchange, and which has a substantial interest in Tencent.
Relationship between the US and China
Trump’s decree raised concern about the impact of the deteriorating relationship between the United States and China on, for example, companies and financial markets. There is also confusion about the scope of the decree. An official stated that it only covers the use of WeChat and WeChat Pay, but the vaguely defined decree could also put pressure on Tencent’s business relationships with US corporate giants.
Tencent also develops games and collaborates with well-known American industry peers such as Activision Blizzard and Electronic Arts. Tencent also has a stake in Epic Games, which makes the wildly popular Fortnite game, and League of Legends developer Riot Games.
Trump also signed a presidential decree on Thursday banning transactions with ByteDance, the Chinese company that owns the TikTok app, in 45 days. The president on Monday accepted the possibility that a US company would buy the platform that allows users to share short videos, but that must be done by September 15. Microsoft is negotiating with ByteDance for a takeover.
Trump announced last week that he was going to ban TikTok. He fears that ByteDance will pass on information about American citizens to the Chinese government via the popular app. The company itself has denied that.
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