WeChat suspends new account registrations in China

WeChat suspends new account registrations in China

President Joe Biden is reducing some uncertainty faced by Chinese tech companies in the United States, erasing parts of the Trump-era legacy. The president signed an executive order revoking actions targeting TikTok, WeChat and other Chinese apps put forward by former President Donald Trump, according to a statement released by the White House on Wednesday.

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Instead, President Biden signed a new order requiring the Commerce Department to review apps with ties to “jurisdiction of foreign adversaries” that may pose national security risks.

The Biden order withdraws two orders by former President Trump, one of which was issued in August and sought to block U.S. business transactions with TikTok and WeChat. The other, announced in January, targeted eight Chinese services including WeChat’s payment feature, Tencent’s QQ messenger, and Ant Group’s Alipay wallet.

TikTok and WeChat

The orders to ban TikTok and WeChat in the U.S. had been blocked by federal court jurisdictions. Separately, the Trump administration’s attempt to force a sale of TikTok’s U.S. operations was also shelved.

The “increased use in the United States of certain connected software applications designed, developed, manufactured, or supplied by persons owned or controlled by, or subject to the jurisdiction or direction of, a foreign adversary,” which the Secretary of Commerce has defined to include China among others, “continues to threaten the national security, foreign policy, and economy of the United States.”

Chinese tech firms will most likely remain a high priority

Scrutiny over Chinese tech firms will most likely remain a high priority for U.S. regulators, but policies may be more methodical under the presidency of Joe Biden. Chinese companies coveting the U.S. market will have to be better prepared for data compliance challenges.

The order directs the secretary of Commerce, in consultation with the secretary of State, the secretary of Defense, the attorney general, the secretary of Health and Human Services, the secretary of Homeland Security, the director of National Intelligence, and the heads of other agencies as the secretary of Commerce deems appropriate, to recommend actions to protect Americans’ data on platforms owned or controlled by a “foreign adversary” within 120 days.

Facebook and Google also collect large amounts of user data

It’s no secret that American tech companies like Facebook and Google also collect large amounts of user data, but the “scope and scale” of TikTok’s app’s data collection makes it easier for Chinese spies to answer “all kinds of different intelligence questions” on U.S. nationals, Anne Neuberger, NSA’s director of cybersecurity, told TechCrunch at Disrupt 2020. She said there were “greater concerns on how [China] in particular could use all that information collected against populations other than its own.”

Chinese tech firms have produced a raft of top-ranking apps in the U.S. TikTok, which has been working to make Singapore its beachhead following the U.S. government’s attempted ban, came in second among the free apps on the U.S. App Store as of writing. CapCut, a video-editing app also owned by ByteDance app, has seen a surge in downloads in the U.S. recently. Mobile games from Tencent and smaller studios continue to rack up big bucks in the U.S., and fast-fashion shopping app Shein is outpacing Amazon’s growth in the country.

The U.S. Department of Commerce

Tencent’s WeChat said on Tuesday it is temporarily suspending registration of new users in China as it works to comply with “relevant laws and regulations,” the latest Chinese firm to face regulatory scrutiny in the world’s largest internet market.

In a social media post, Tencent said it is “upgrading” its security technology to align with all relevant laws and regulations and while this process in underway “registration of new Weixin (WeChat’s Chinese app) personal and official accounts has been temporarily suspended.”

“Registration services will be restored after the upgrade is complete, which is expected in early August,” said WeChat, which has amassed over 1.2 billion monthly active users in China as of earlier this year.

It’s not immediately clear which law WeChat is citing in its announcement but the move comes amid a broad crackdown on tech firms by Chinese regulators. The crackdown has wiped billions of dollars in market cap for Chinese firms in recent weeks and many high-profile global investors including SoftBank are impacted by it.

Registration services will be restored after the upgrade is complete

This is the first time WeChat, which operates as a superapp in China, has had to take a step of this kind in more than a decade. In addition to offering a messaging service, Weixin also allows users to make online payments and access a range of financial services.

(In other markets, it’s a different story. Donald Trump had signed an order to ban transactions with TikTok and WeChat in the U.S. last year. President Joe Biden revoked and replaced those actions last month.)

Some analysts believe that the Chinese government is concerned about the growing influence of tech firms in the country and also the privacy of its citizens’ data.

Earlier this month, China’s cybersecurity regulator ordered ride-hailing giant app Didi to stop signing up new users. That move had come days after Didi’s $4.4 billion initial public offering on the New York Stock Exchange. Didi’s app, which has been pulled from the app stores in China, illegally collected personal data of its customers, the regulator accused.

New laws and regulations

WeChat will temporarily suspend registrations of new users in China in order to comply with new laws and regulations.

The update was announced after Chinese regulators said they would crack down on tech companies. However, it’s not entirely clear what these changes mean for the company.

The company said in a recent social media post that it was upgrading its security technologies to align with local laws and regulations and that was affecting some personal and official accounts.

Therefore, registrations of new Weixin (the Chinese WeChat app) accounts had been put on hold. However, the company said it would restore these services once the upgrade was complete.

WeChat has over 1.2 billion monthly active users.

It’s the first time that the Tencent-owned app had to suspend new registrations and it’s not entirely clear when services will be up and running again.

There are concerns that the Chinese government may be exerting a growing influence on tech firms.

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