New Bans on Chinese Companies
Trump Bans Transactions with More Chinese Apps
President Donald Trump signed an executive order on Tuesday that would ban transactions on eight Chinese-connected apps, including Alipay , the payment and lifestyle app owned by Jack Ma’s Ant Group and used by more than one billion people around the world. It will also apply to three apps from Tencent (TCEHY): WeChat Pay, QQWallet, and Tencent QQ. Camscanner, a scanning app by INTSIG Information Co., will also be impacted. Camscanner was downloaded 4.4 million times in the United States last year.
The executive order is set to take effect in 45 days, though Trump leaves office in about two weeks. President-Elect Joe Biden’s transition team has not yet commented on how they will handle the executive order.
Reasons for the Ban
Trump has voiced concerns about these apps accessing private information from users, which could be used by the Chinese government to “track the locations of Federal employees and contractors, and build dossiers of personal information.” A senior official with the Trump administration said in a briefing that the order would prevent Americans’ data from being used by the Chinese government as a “mass tool for global oppression.”
Meanwhile, Chinese Foreign Ministry spokeswoman Hua Chunying called the order “another example of the US stretching the concept of national security, abusing its national power, to oppress foreign companies.”
Federal judges have blocked the past bans the Trump administration imposed on Chinese social media companies TikTok and WeChat. “As with the WeChat and TikTok executive orders, the underlying threat that the administration is identifying here is not clearly tied to any specific actions taken by the companies named in the order,” said Anna Ashton, Vice President for Government Affairs at the US-China Business Council.
NYSE Could Once Again Reverse Delisting Decision
Meanwhile, the New York Stock Exchange is reassessing its decision to allow three Chinese telecom companies to remain listed on the exchange. The NYSE said last week it would delist China Mobile (CHL), China Telecom (CHA), and China Unicom (CHU) after the Trump administration banned investments in companies tied to the Chinese state. The decision was reversed on Monday, but the board could return to its original ruling.
The sudden reversals of the decisions highlight the level of tension around Chinese companies. Investors in these companies will be carefully monitoring developments during the final days of the Trump administration and during the transition to a Biden administration.
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