U.S. President Donald Trump on Tuesday signed a decree banning business transactions on eight Chinese-related applications, including the Alipay payment platform run by Chinese millionaire Jack Ma’s Ant Group and apps run by Chinese giant Tencent Holdings.
Trump said apps can access their users’ private information. They could be used by the Chinese government to “track the location of federal employees and contractors, and create personal information files,” he added.
The Executive Order shall become effective 45 days after the departure of Trump. A spokesman for the president-elect’s transition team, Joe Biden, declined to comment on the presidential decree.
On Wednesday (6) China stated that it would take the necessary measures to ensure the rights of companies affected by the decree.
American companies that do business with China – including Apple, Ford, Walmart and Walt Disney – have already said to an order by President Trump on WeChat multifunction app by Tencent, that it is important to do business there. American companies could raise similar concerns about the new decree.
A federal judge issued a temporary blocking of the decree, but the government appealed.
In a statement, a senior government official said the new regulation is intended to prevent US user data is used by the Chinese government to be fired for what the authorities described as “mass instrument for global oppression.”
“This is another example of how the United States exaggerate the concept of national security and abuse their national power to foreign companies to suppress,” said a spokeswoman for the Chinese Foreign Ministry, Hua Chunying, on Wednesday. “It has some implications for Chinese companies, but it would mainly harm American consumers.”
A former US trade official said the executive order could raise concerns with companies about the ability to restrict certain transactions in China, a hot market for many American multinational corporations.
At the same time, the Trump administration’s move adds to the difficulties for the Biden administration by highlighting issues that are increasingly worrying for some American companies about national security, privacy, and lack of access to China.
Alipay, a payment and lifestyle app with more than 1 billion users, is owned by Ant Group, a Chinese tech finance giant controlled by Jack Ma. A representative from Ant did not comment immediately.
The decree also applies to three apps Tencent – Pay WeChat, QQWallet and Tencent QQ. A Tencent representative did not respond immediately.
While WeChat and Alipay are ubiquitous in China, they are less popular in the US. According to the research firm Sensor Tower Alipay has been downloaded in the past year in the US 207,000 times from the App Store and Google Play. WeChat – WeChat including pay – was downloaded 1.6 million times last year, Sensor Tower said.
In addition to apps from Ant and Tencent, the decree also applies to camscanner, a scanning application from Shanghai’s Intsig Information Co. According to Sensor Tower, 4.4 million downloads were made in the United States last year.
The ban also applies to apps connected to the Chinese SHAREit, Vmate and WPS Office.
The new move comes after the Trump administration issued some executive orders in August aimed at pushing new boundaries to Chinese social networking apps like TikTok and WeChat, citing national security concerns. Both decrees were challenged in court.
Two federal judges have the ban on TikTok by the Trump government also blocked separately. The ban would have prevented American companies from doing business with TikTok, including hosting company data and distributing company content, which would have made the application fundamentally inoperable in the US.
In issuing the executive order for the effective closure or sale of TikTok to an American company, the government feared that ByteDance might pass information about American users to the Chinese government. The company said it would never do that.
Anna Ashton, vice president for government affairs at the US-China Business Council, said Trump’s arrangement appears to be based on the possibility that data could be shared with the Chinese government – and not on a real incident.
“As with the Executive Orders of WeChat and TikTok is the underlying threat that identifies the government not clearly linked to specific measures referred to in the order businesses,” Ashton said in a statement. “Chinese data breaches and hacking activities are mentioned, but they are not directly related to the companies targeted by the president.”
A government official said the White House continues to believe its previous orders for WeChat and TikTok are in. The official added that the new decree is unlikely to be challenged under the International Emergency Economic Powers Act, the law that overturned previous orders.
The Trump administration also tried to restrict Chinese telecommunications companies like Huawei through decrees. These laws should ensure the safety of American networks, but they seemed the competitiveness of Chinese companies in the world to be undermined if the mobile service of the next generation, 5G, is available.