Trump signs order banning transactions with eight Chinese apps

Ban includes transactions with Alipay, owned by Jack Ma’s Ant Group, which is also under regulatory pressure in China.

Alipay, owned by Ant Group which is an affiliate of Chinese e-commerce giant Alibaba, is one of the payment apps being targeted by the Trump administration [File: Aly Song/Reuters]

US President Donald Trump has signed an executive order banning transactions with eight Chinese software applications, including Ant Group’s Alipay, the White House said, escalating tensions with Beijing before President-elect Joe Biden takes office this month.

Meanwhile, Chinese authorities are planning to force Ant Group to share troves of consumer-credit data, a further push to curb what Beijing regards as its unfair competitive advantage over smaller rivals, The Wall Street Journal reported.

Trump’s executive order, first reported by the Reuters news agency, tasks the Department of Commerce with defining which transactions will be banned under the directive and targets Tencent Holdings Ltd’s QQ Wallet and WeChat Pay as well as Alipay.

The move is aimed at curbing the threat to Americans posed by Chinese software applications, which have large user bases and access to sensitive data, a senior official told Reuters.

A US-based Tencent spokeswoman did not immediately comment.

The order signed by Trump also names CamScanner, SHAREit, Tencent QQ, VMate and WPS Office. It says, “The United States must take aggressive action against those who develop or control Chinese connected software applications to protect our national security.”

A US official told Reuters that even though the order gave the Commerce Department 45 days to act, the department plans to act before January 20 when Trump leaves office to identify prohibited transactions.

‘Vast swaths of information’

Trump’s order says “by accessing personal electronic devices such as smartphones, tablets, and computers, Chinese connected software applications can access and capture vast swaths of information from users, including sensitive personally identifiable information and private information”.

It added the data collection “would permit China to track the locations of federal employees and contractors, and build dossiers of personal information”.

The Chinese embassy in Washington, DC did not immediately respond to a request for comment.

Another official said the order mirrors earlier Trump executive orders signed in August directing the Department of Commerce to block some transactions with WeChat and Chinese-owned TikTok seeking to bar some transactions that have been blocked by US courts.

Any new transactions prohibited by the Trump administration are likely to encounter similar court challenges as the Commerce Department faced when it sought to block transactions with WeChat and TikTok. The department’s orders would have effectively banned the Chinese app’s use in the US and barred Apple Inc and Alphabet Inc’s app stores from offering them for download for new users.

US Secretary of Commerce Wilbur Ross said in a statement he supports Trump’s “commitment to protecting the privacy and security of Americans from threats posed by the Chinese Communist Party”.

Semiconductor Manufacturing International Corporation (SMIC) logo
The US Commerce Department added dozens of Chinese companies, including the country’s top chipmaker SMIC and Chinese drone manufacturer SZ DJI Technology Co Ltd, to a trade blacklist [File: Aly Song/Reuters]

The latest action has been under debate within the administration for an extended period. Many administration officials are eager to cement the hardline US position with China on a number of fronts before Trump leaves office.

Last month, the Commerce Department added dozens of Chinese companies, including the country’s top chipmaker SMIC and Chinese drone manufacturer SZ DJI Technology Co Ltd, to a trade blacklist.

Also last month the administration published a list of Chinese and Russian companies with alleged military ties that restrict them from buying a range of US goods and technology.

In November, the administration put on hold an effort to blacklist Ant Group, the Chinese financial technology company affiliated with e-commerce giant Alibaba.

Double trouble

Ant is also facing its own problems at home.

Not only are authorities preparing to regulate Ant’s lending business like a bank, which would cause it to supply more of its own funds when making loans, they are also planning to break what they see as the company’s monopoly over data, The Wall Street Journal reported citing officials and government advisers with knowledge of the regulatory matter.

Ant declined to comment on that issue, the paper said.

One plan being considered would require Ant to feed its data into a nationwide credit-reporting system run by the central bank, the People’s Bank of China, the people familiar with the matter told the Journal. Another option would be for Ant to reportedly share such information with a credit-rating company that is effectively controlled by the central bank.

Source: Reuters, The Wall Street Journal