BY PETE SWEENEY
China’s Tencent is set for unwanted attention overseas. Its WeChat app, with over 1 billion users, is indispensable to life and business in the People’s Republic, and plays an important role in Beijing’s campaign to monitor and influence Chinese people abroad. The debate over containing it will test Western commitment to free information flow.
The Hong Kong-listed company looks ripe for a session on the griddle. ByteDance, owner of the TikTok video app, is already under investigation in the United States. But if TikTok is a risk, WeChat is too. It is obligated by its government to share user data, plus censor conversations and news. It has flown under the radar because it has few non-Chinese users. This is unlikely to last.
The app is already under fire in Australia, which has around half a million residents born in China. Politicians there are nervous about Chinese meddling in their political system. The Labor Party recently alleged misleading articles describing their policies on immigration and gay rights were disseminated over WeChat – similar to how Facebook was criticised after the U.S. presidential election.
The $461 billion company is the largest constituent of the Hang Seng Composite index, and the second-largest member of the MSCI China Index. While China remains its main market, revenue in other countries from advertising and payments could be at risk. It may be forced to divest stakes in U.S. game studios, including a 40% piece of Epic Games HSBC estimates to be worth $6 billion, or be unable to co-produce films, as it did with “Wonder Woman” and “Venom”.
But WeChat could also present a challenge that previous targets of U.S. ire, like telecom-equipment maker Huawei Technologies, did not: how to block the flow of data. Authorities could tell Tencent to stop transmitting anything back to China, or to store data locally. The most extreme measure would be to block WeChat outright, the way Beijing blocks Facebook.
WeChat is media, not message. But any of the above moves would grease the slippery slope Western societies are already easing on to. With an election around the corner, 40% of Americans believe the government should restrict false information online, per Pew Research Center polling. As Europeans and North Americans harden physical borders, the idea of them creating their own versions of the Great Firewall seems less far-fetched.
First published Dec. 20, 2019
IMAGE: REUTERS/Bobby Yip