How the ban on the Chinese ‘app’ WeChat would affect the US economy

How the ban on the Chinese 'app' WeChat would affect the US economy
© AP Photo / Mark Schiefelbein

More than a dozen companies, including Apple, Ford, Walmart and Walt Disney, sided with the Chinese ‘app’ WeChat, which could be blocked in the US, accused of putting the country’s national security at risk. An expert explained to Revyuh how this measure threatens US trade.

Business representatives expressed concern about Washington‘s recent move in a phone conversation with the White House, The Wall Street Journal reported. Companies could “be at a serious disadvantage to each of their competitors,” warned US-China Business Council Chairman Craig Allen, cited by the media.

Zhou Yongsheng, a professor at the Institute for International Relations Studies at the University of Foreign Affairs of China, stated in an interview with media that the Trump Administration “does not understand what shock and damage this decree could bring to US companies. And how lasting and painful the repercussions of the loss of part of the Chinese market would be. ”

The expert indicated that, for Washington, it is nothing more than a “political act.” At the same time, he admitted that both Donald Trump, Vice President Mike Pence, and Secretary of State Mike Pompeo “don’t have enough knowledge about how technology companies work.”

Yongsheng stressed that for a large company, losing the Chinese market would mean losing between a quarter and a third of the global market. He added that even if they manage to regain lost positions, US companies will never be able to reach more than 50% of the market globally.

On August 6, Trump signed an executive order prohibiting US companies from transacting with Chinese Tencent Holdings and ByteDance, respective creators of the WeChat app and the video app TikTok, 45 days after the document was signed. As of September 15, Asian companies will no longer be able to carry out transactions in the US territory.

Yongsheng warned that Apple could become one of the main victims of the sanctions, and as WeChat is the main means of communication for the Chinese. If it is blocked, between 200 and 300 million Chinese users will no longer be able to purchase Apple smartphones.

“This, in turn, will lead to China’s market share crashing and then cease to exist,” he said.

Earlier, the spokesman for the Asian country’s Foreign Ministry, Wang Wenbin, accused several US politicians, including Pompeo, of trying to use state power to pressure Chinese technology companies.

He affirmed that these measures are nothing more than defamation and political manipulations that aim to maintain the US monopoly in the technological field.

The US-China Business Council, in turn, published the results of a survey in which more than 100 US companies that were members of the body participated. 86% of those surveyed confessed that their businesses will get affected by the contradictions between Beijing and Washington. At the same time, 83% of the participants defined China as one of the priority foreign trade partners, and 87% stated that they do not plan to move their production outside of China.