Trump Is Wrong: A Total Ban on WeChat Goes Too Far

 In China, FVEY, P5

WeChat is an inter­net appli­ca­tion owned by Chinese tech com­pa­ny Tencent. It may not sound famil­iar to most Americans, but it is a tool widely used in China and among Chinese com­mu­ni­ties world-​wide. It is a one-​stop-​shop that com­bines pay­ment ser­vices, social media, mes­sag­ing plat­forms, and news out­lets. This app is now facing a ban in the United States.

Last month, President Trump issued an executive order relat­ed to WeChat, under which “any trans­ac­tion that is relat­ed to WeChat by any person, or with respect to any prop­er­ty, sub­ject to the juris­dic­tion of the United States” would be banned. The ratio­nale was that WeChat “con­tin­ues to threat­en the nation­al secu­ri­ty, for­eign policy, and econ­o­my of the United States.” The order itself lacks details on how exact­ly a ban would work, and the Department of Commerce is expect­ed to issue imple­ment­ing rules by September 20. The scope of the reg­u­la­tion could range from ban­ning the app from smart­phone app stores, to ban­ning all U.S. firms, even ones locat­ed out­side of the U.S., from deal­ing with WeChat. The ban would affect both indi­vid­ual users of the app and busi­ness­es who rely on it.

WeChat does present some risks, but ban­ning it nation­wide is overkill. As I explain below, a more tar­get­ed approach, such as ban­ning the app on work phones of defense depart­ment employ­ees, like the Australian government did, or even for all gov­ern­ment work­ers, is more rea­son­able.

As noted, there is a lot of uncer­tain­ty sur­round­ing the exec­u­tive order. With regard to indi­vid­u­als in par­tic­u­lar, it is unclear what “trans­ac­tions” would be cov­ered. If the ban is intend­ed to take the appli­ca­tion off the var­i­ous mobile mar­ket­places, it will seri­ous­ly dis­rupt person-​to-​person com­mu­ni­ca­tions that have been cru­cial for the 19 million active WeChat users who live in the United States. For some of these users, WeChat is their main chan­nel of keep­ing in touch and a pri­ma­ry source of infor­ma­tion; for others, the app is one of the tools they use to make money and earn a living.

The inabil­i­ty to use WeChat in the United States could spook many poten­tial Chinese stu­dents and vis­i­tors, result­ing in a likely drop in school enroll­ment and tourism rev­enues. Chinese stu­dents con­tribute approx­i­mate­ly $15 billion to the U.S. econ­o­my every year, and Chinese tourists con­tribute $36 billion. The number of Chinese stu­dents and tourists was already declin­ing due to deteriorating U.S.-China relations and the COVID-19 pandemic. The WeChat ban, which makes the United States less attrac­tive to Chinese vis­i­tors than other coun­tries who allow the app, can only exac­er­bate this trend.

In addi­tion, the ban could go well beyond per­son­al access to the app and extend to asso­ci­at­ed busi­ness activ­i­ties. The President of the American Chamber of Commerce in Shanghai has noted that all American com­pa­nies, regard­less of their loca­tion, could be barred from any trans­ac­tions relat­ed to the WeChat appli­ca­tion. Because WeChat is so deeply embed­ded in the Chinese people’s daily life and has become a plat­form for a wide range of activ­i­ties, a ban on trans­ac­tions relat­ed to WeChat would include sales, pro­mo­tions, pay­ments and other busi­ness activ­i­ties. For instance, Starbucks and McDonald’s use the appli­ca­tion as a mar­ket­ing and sales plat­form. Filmmakers use WeChat to pro­mote their movies and make ticket sales. Walmart and many other venders use the app to sell prod­ucts. In fact, the app accounts for as much as 30% of all Walmart sales in China. A WeChat ban could cost cor­po­rate users sig­nif­i­cant rev­enues.

A ban could also result in a 30% decline of iPhone sales. Many Chinese neti­zens have said that if they have to choose between iPhone and WeChat, they will ditch their iPhones in a heart­beat.

According to a survey con­duct­ed by the American Chamber of Commerce in Shanghai, nine out of ten com­pa­nies fore­cast that the ban would have a neg­a­tive impact on their busi­ness in China, with nearly half of them pre­dict­ing a loss of rev­enue because of the ban. Furthermore, a WeChat ban could add more fuel to the already tense rela­tions between the United States and China, making it more dif­fi­cult for busi­ness­es to oper­ate. So far, 86% of com­pa­nies have report­ed a neg­a­tive impact on their busi­ness with China as a result of the grow­ing ten­sions. The sit­u­a­tion will only get worse with a WeChat ban.

Clearly, the WeChat ban comes with huge costs, but are their off­set­ting ben­e­fits? How big a secu­ri­ty risk is WeChat, and would a ban mit­i­gate this risk? With an increas­ing­ly hos­tile geopo­lit­i­cal rival­ry brew­ing, the U.S. gov­ern­ment needs to look care­ful­ly at the cyber prac­tices coming out of China. The Executive Order indi­cates that the ban will pro­tect user data from the Chinese gov­ern­ment and fight against China’s “dis­in­for­ma­tion cam­paigns.” Will they do so?

Despite a lack of direct evi­dence on this point, there have been con­cerns that WeChat would share data with the Chinese gov­ern­ment. If the admin­is­tra­tion is con­cerned about this with aver­age cit­i­zens (as opposed to mil­i­tary per­son­nel or other gov­ern­ment employ­ees, where spe­cial con­sid­er­a­tions apply), instead of ban­ning the app, it could simply warn con­sumers of such risks and let the them choose whether to use the appli­ca­tion. Individuals should have the free­dom to decide the level of risk they are will­ing to take with regard to their per­son­al infor­ma­tion. It’s worth noting that the issues relat­ed to con­sumer data are much broad­er than WeChat. The Chinese gov­ern­ment has other ways, such as through web track­ing and datasets avail­able on the Dark Web, to obtain users’ infor­ma­tion. A better way to pro­tect con­sumer data, from not only the Chinese gov­ern­ment but all gov­ern­ments, is to estab­lish more gen­er­al domes­tic and inter­na­tion­al rules on data pro­tec­tion and hold coun­tries and com­pa­nies account­able for vio­lat­ing these rules.

The Executive Order also high­light­ed that a ban of the WeChat appli­ca­tion will help to mit­i­gate “dis­in­for­ma­tion cam­paigns.” As with user data, if the admin­is­tra­tion is con­cerned about cam­paign med­dling, it is a much larger prob­lem than WeChat and is hap­pen­ing on other plat­forms such as Facebook and Twitter and through other means such as hacking. Focusing on only one appli­ca­tion is insuf­fi­cient and could dis­tract from other cam­paigns coming from other countries.

When for­eign gov­ern­ment try to col­lect data on American cit­i­zens and non-​citizens living in America, for the pur­pose of manip­u­lat­ing them for polit­i­cal or other rea­sons, it is a seri­ous issue. The U.S. gov­ern­ment needs to get a handle on this prob­lem imme­di­ate­ly. In the case of WeChat, how­ev­er, any nation­al secu­ri­ty ben­e­fits of a total ban are out­weighed by the dis­rup­tions to people’s per­son­al lives and the poten­tial eco­nom­ic losses for indi­vid­u­als and busi­ness­es that would likely mate­ri­al­ize in the pres­ence of a ban. There are real con­cerns relat­ed to WeChat, but more tar­get­ed actions like the Australians have taken make more sense. A total ban on WeChat simply goes too far.

This arti­cle was first pub­lished by the Cato Institute.

Image: Reuters

National Interest source|articles

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