China’s Tencent downplays Trump’s WeChat app ban

Tencent downplayed Donald Trump's ban on WeChat

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Tencent downplayed Donald Trump’s ban on its WeChat app, believing it will only affect its operations in the United States.

The tech giant operates an equivalent messaging platform in China called Weixin which it hopes won’t be affected.

The biggest fallout could be Apple’s sales in China if its iPhones aren’t allowed to download Chinese messaging apps.

WeChat has more than a billion users worldwide, but it claims that the United States only accounts for 2% of their revenue.

On Friday, US President Donald Trump ordered US companies to stop doing business with WeChat and TikTok within 45 days citing national security concerns.

The ban on TikTok was expected but still “shocked” the owners of the ByteDance company. WeChat, and its parent company Tencent, also found themselves caught in the crossfire of mounting tensions between the US and China.

However, Tencent, the world’s largest gaming company, downplayed Trump’s executive order when it reported its second quarter results Wednesday. It saw a 37% increase in profits.

“If you look at the executive orders from May 2019 and then of course the executive order a couple of days ago, they specify very clearly that they cover US jurisdiction and as a result we don’t see any impact on the companies advertising on our platform in China,” “said James Mitchell, Tencent’s chief strategy officer.

Bigger bite

Business analysts are unclear about the full implications of the US bans on Tencent and ByteDance and are awaiting further details.

There are fears that Apple will suffer if the ban extends to its operations in China. Experts say its iPhone sales will be hit hard if Chinese consumers are not allowed to download messaging apps like Weixin on them.

The executive order said it would prohibit “any WeChat-related transactions by any person, or with respect to any property, subject to US jurisdiction, with Tencent Holdings Ltd. (aka Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China , or any subsidiary of such entity “.

Trump said the spread of mobile apps developed and owned by Chinese companies in the United States “threatens the national security, foreign policy and economy of the United States.”

According to Bloomberg’s calculations, the Chinese market is worth around $ 44 billion (£ 33.7 billion) a year for Apple.

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