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US President Donald Trump not only wants to ban the popular entertainment app TikTok, but also wants to impose strong restrictions on the ubiquitous app WeChat in China.
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According to Trump, TikTok is a threat to the national security of the United States, because the Chinese government could obtain all kinds of data from the countless American TikTok users.
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“That data collection threatens the Chinese communist party to gain access to the personal information of Americans,” the decision said. “The United States must take aggressive action against the owners of TikTok to protect our national security.”
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The ban also applies to WeChat, a social media app from the Chinese technology group Tencent. That app also ‘collects large amounts of information from users’, according to the decision.
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That will hit even harder in Beijing, because WeChat is ubiquitous in China and is used by more than 1 billion people. It is an essential link between China and the Chinese diaspora and is often used by foreigners with professional or private ties in China.
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The ban cut WeChat owner Tencent’s share on the Hong Kong stock exchange by 10 percent. That also sent the Hong Kong stock exchange itself more than 2 percent in the red.
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In a response, TikTok says he is shocked. “The decree was issued without any fair trial,” the company said. “We have been trying to find a constructive solution with the American government for more than a year. Instead, the government ignores the facts and imposes the terms of an agreement without going through the normal legal process. “
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TikTok is now investigating ‘all possibilities to prevent circumvention of the rule of law and fair treatment for both TikTok and its users’.
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Stricter rules for Chinese equities
The US authorities are not only targeting companies such as TikTok and WeChat. They require Chinese companies listed on a US stock exchange to comply with local audit requirements. If they don’t, they risk having to give up their listing, writes The Wall Street Journal.
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Chinese companies that are already listed on the Nasdaq or the New York Stock Exchange (NYSE) have two more years to allow supervisors to inspect their financial audits.
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However, there is a potential stumbling block, because under Chinese law, residents and businesses of the country should not respond to requests and obligations from foreign regulators without the green light of their own regulators and Beijing.
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