TikTok and WeChat are Chinese social networking services developed by ByteDance ad Tencent respectively. Both of these apps made international communication easy. Be it modes of entertainment or interacting with a loved one abroad, the apps made a significant impact on the international market. TikTok became a home for income source for many. People started dancing, singing, showing their talents in unique presentable ways.
However, it is said, “what goes up must come down.” This is what happened with TikTok and WeChat. Several countries have been hostile to China due to their policies with them. This includes big names like India and the USA. India already banned TikTok in July. About China-USA, the divorce has been a long time coming. And it is going to be dirty. Trump has been insinuating that China might be doing undesirable activities through its apps.
What happened to TikTok and WeChat in the USA?
On Friday, 7th August 2020, USA’s President Donald Trump declared that it would stop its transactions with China via technology. This means that TikTok and WeChat will not operate in the US boundaries 45 days from now. Trump told his executives to stop all the transactions with China through technology, and that includes big social networking apps like TikTok and WeChat.
Trump wants TikTok to sell its US Business and operations if it wants to avoid a ban. Microsoft is supposed to buy Tiktok’s US operations before 15th September.
The reason for the new TikTok and WeChat Order
Trump explained himself by saying that banning both these apps is a ‘national emergency.’ In his executive order, the president argued that the apps “automatically captures vast swaths of information from its users”. This information could be used against American interests and hamper national privacy.
Impact on the Chinese stock market
Chinese stocks lost approximately $76 billion in value on Friday. Shares in Tencent fell as much as 10.1 percent in Hong Kong. Though Tencent has managed to recover its loss by 5 percent. Equity traders said that this could potentially bar all transactions with Tencent and ByteDance. Tencent also has stakes in companies like Tesla, Spotify, and Epic Games.
Other than the companies of these apps, stocks of Ali Baba and JD.com fell 6.7 percent and 5 percent, respectively. Mainland China’s tech-focused stock benchmarks also fell on Friday. If the US bans all transactions with Tencent, “it’s a different ballgame, and that’s what the market is uncertain about at the moment,” said Andy Maynard, a trader at China Renaissance.
Beijing has accused the US of “arbitrary political manipulation and suppression.” This move will further rock the trade relations between Beijing and Washington.
This decision will upset the Chinese people in the USA. James Lewis, a technology expert at the Center for Strategic and International Studies, predicted, “Absolutely, China will retaliate.”