A smart phone with the icons for the social networking apps WeChat, WhatsApp, Facebook Messenger FaceTime, and others are seen on a smartphone screen.
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When President Donald Trump late Thursday issued an executive order to effectively ban WeChat in 45 days, it was a devastating blow to the U.S. users who rely on the app to communicate with family and friends in China.
WeChat operates a slew of services, such as ride hailing and making payments, within the app in China, but its flagship service is its messaging platform. It's picked up little traction in the United States compared with China, but the Chinese-owned messaging service is key for people who need to communicate between the two.
Banning the app would give those who use it no other free option to quickly communicate with friends and family in China. It's impossible for users to switch over to U.S.-based messaging platforms, since China has already blocked the apps that Americans rely on, such as Facebook's Messenger and Instagram, Google and Snapchat.
WhatsApp, another popular global messaging service owned by Facebook, is also blocked in the country. Users can access the apps by going through a virtual private network, or VPN, but that's often inconsistent and not an easy fix.
The bans of U.S.-based apps in China have allowed WeChat to swoop in and become a key service for funneling communication between the two countries.
I didn't realize the prevalence of WeChat until four years ago, when a good friend went to visit her family in China for a month. Instead of relying on our usual Apple iMessage or Facebook Messenger to chat, we moved to WeChat. She explained that it's the only way for her to send family members daily updates or have regular calls with them. A ban would effectively cut off easy communication between millions of families.
The executive order has already scared investors. WeChat is owned by the tech giant Tencent, which saw shares fall 5.04% on Friday. Tencent is also a titan in the video gaming space, with stakes in companies such as Activision Blizzard and Riot Games, so the repercussions could extend beyond WeChat.
"We are reviewing the executive order to get a full understanding," a Tencent spokesperson told CNBC in an email.
The United States has recently ramped up its rhetoric against Chinese tech companies, with most of the attention going to TikTok, a social media platform operated by ByteDance. But Microsoft has already emerged as a strong contender to acquire TikTok's U.S. business. There are no apparent leaders looking to save WeChat's business in the U.S., meaning it could get left behind.
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August 07, 2020 at 09:20PM
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Trump cutting off WeChat would be a devastating blow to some Chinese families in the U.S. - CNBC
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