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What the WeChat Ban Could Mean For Apple And Google?

What the WeChat Ban Could Mean For Apple And Google Supply Chain: The Data Tussle and 5G’s Potential. To understand the tech war between the U.S. and China is to understand the power information wields in the 21st century. Continued data surveillance and espionage will determine the world’s next superpower. 

Trump Ordered WeChat Ban

On August 6th, President Donald Trump issued an executive order to ban Chinese-owned social media application titan, WeChat, from being used in the United States. This ban is one of the latest attacks made by the U.S. on Chinese-owned businesses following the tech war between the two economic world powers. On September 20th, this order took effect cutting millions of Americans off these platforms.

While the ban was facing legal contest by the U.S. citizens, a Magistrate Judge, Laurel Beeler, argued that implementing the order posed serious challenges to the U.S. constitution on First Amendment Rights which guarantees citizens’ freedom of speech. At the same time, Judge Beeler said: “While the general evidence about the threat to national security-related to China (regarding technology and mobile technology) is considerable, the specific evidence about WeChat is modest.”

Trump Administration And Its Allegations Against China

President Trump’s led administration has maintained its allegations against China’s data espionage. The U.S. government has consistently reiterated that security threats and data privacy are the motives for issuing the order. All through his regime, President Trump has echoed his resolve to protect the American citizens from alleged inversion of their personal data by Chinese businesses directly and the government indirectly. And during the legal contest, the U.S. Justice Department argued that blocking the executive order would “frustrate and displace the president’s determination of how best to address threats to national security.”

The ban raised concerns as to what would be the consequences on not only the American citizens who use WeChat for varied online services but also the U.S. owned businesses that have close ties with them like the Apple Incorporations and its supply chains and Google Incorporations.

What Do We Know About WeChat?

WeChat is a subsidiary of the Chinese business conglomerate, Tencent which was established in 2010. In China, the app goes by the name Weixin. The app is used by over a billion users globally making it the most popular app in China. 

In the United States alone, WeChat had more than three million active users as of August 2020 according to App Annie as reported by Washington Post. The app before its ban in the U.S. was downloadable from Apple Store and Google Play.

For the millions of WeChat users, between China and the U.S., the app serves as a lifeline connecting families, friends, colleagues, and businesses on a daily basis. The app also serves numerous functions including getting taxi services, doing groceries or other shopping activities, reading the news, and chatting. Until May before its ban by the Tencent management, the app was also used to trade cryptocurrencies.

What Could The Ban Mean To The U.S.-based Apple And Google Incorporations?

In the past 16 months, China has been pragmatic in clamping back at the U.S. in its unraveling trade relations that have strained severely. Following the issued ban, there were speculations that Apple and Google would be the victims of a Chinese retaliation due to the company’s business progress in China. Mei Xinyu, a researcher who advises the Chinese Commerce Ministry, after referring to America’s ban as a “bad advertisement” to the American economic disposition, said that China will not be retaliating.

According to Xinyu, while referring to the Chinese government said: “We attach great importance to maintaining and promoting normal domestic production and trade, and enhancing the interests of relevant investors, employees, and local governments by meeting consumer needs.”

Will China Retaliate Against US Companies?

He said that China could embark on measures to retaliate against the US-owned companies that have been added to the country’s blacklist in other ways. “A disease can be cured by medication, massage, acupuncture, and minimally invasive surgery. You don’t need to tear the guts out, ” he concluded.

Some of the US-based social media platforms have long been banned in China. Facebook was banned after the July 2009 Ürümqi riots following allegations that Xinjiang independence activists were using Facebook as part of their communications channel. Google, Twitter, and Instagram are also banned in China. According to George Shen, a Chinese resident in the U.S. in an interview with CNBC, the “dilemma that people are facing right now is created by the Chinese government.” 

Financial Impact Of The Ban

Another financial impact of the ban on the social media titan, WeChat is its effect on WeChat Pay and subsequently the Chinese digital Yuan. Tencent is one of the companies developing digital Yuan and plans are in place for people to access digital currency through the app. But with the ban, it will be a long way before the digital Yuan can find its way to Chinese nationals in America.

Despite speculation on the economic impact on Apple and Google, the companies appear to be thriving. There are recent plans by Apple to diversify its production in India with plans to invest 900 million in manufacturing. A plan which will significantly reduce its risks of losses should China strike at any time.

What is the Buzz With 5G And Why Is Data Such A Big Problem 

To understand the tech fight between the U.S. and China is to understand the power information wields in the 21st century. In the early 19th century during the oil boom, revenues generated from crude oil were used to build world-class civilization. In the following decades, the story changed and value shifted. With technological innovations, the world became connected and information was shared. 

The internet became the trojan horse for a novel economic boom that would infiltrate every nook and cranny of our lives. The richest companies in the world and the most powerful countries are the ones with a robust database of people’s personal and private information. And the success of such institutions and countries are hugely dependent on their continued surveillance and management of individual data- the free raw material- from people.

5G Remains A Source Of Conflict Between Countries

The 5G network has remained an omnipresent force and an unrelenting source of the struggle between nations. The world is moving, at an unprecedented pace, to a point where everything will be internet enabled. The 5G internet, even though it is overtly overrated, promises such changes. 5G offers an internet transmission speed of very high-frequency spectrum(in mm spectrum), lower latency, and the ability to connect large numbers of devices that are suited for high-end applications. 

Is 5G Overrated?

However, 5G remains overrated because it offers high transmission speed but can only cover a very short area of the network. It, therefore, requires huge capital investment to deploy antennas suited to cover wider area networks. The internet of things (IoT) offers that and would be made possible through 5G technology. This development is made possible primarily by the telecommunication industries. The security of the information shared is a major concern and even more when a hostile power is in control of the 5G network.

The 5G technology offered by Huawei is said to be the best network by far the other competitors. It is secure, reliable, fast, and cheap but President Trump has severely called out that “Huawei is dangerous.” He continued,  “We cannot allow any other company to outcompete the United States in this powerful industry of the future. The 5G network has to be safe, and secure. They must be strong. They have to be guarded against the enemy.”

Huawei Clears Security Allegations

To clear security allegations against them and prove that their 5G technology is robust, Huawei shared its code by allowing the British National Cyber Security Center (BNCSC) to scan it for any insecurity standards or backdoors which could allow the Chinese Government to have access to the individual private data but nothing was found. However, countries due to security threats have banned Huawei’s 5G. Last month the Czech Republic banned Huawei’s 5G technology. Some other countries have either banned Huawei’s 5G technology completely or have restricted their use of Huawei’s sensitive telecommunication equipment.

Is It Only Security Or Is It The Entire Ecosystem?

But the data tussle is not only about security as much as it is about other factors encompassing the entire ecosystem of the digital economy such as the social, the skills, the infrastructural, and the economic boom it offers. With the influence of the coronavirus pandemic, many companies switched to online methods. The economic effect of the pandemic could be grossly recovered from the 5G economic boom in the coming years. 5G promises to increase the productivity of businesses, create massive jobs and increase wages in the labor market.

Winning the 5G race also gives countries power satisfaction and control. This is one of the reasons the telecommunication industries are constantly arguing about who was the first to deploy and roll out the 5G technology. But as of today, China’s Huawei is leading the race.

If you find any mistakes or inaccuracies in this article, please don’t hesitate to contact us via email at info@regtechglobal.com

Veronica Ugwu
Veronica Ugwu
Veronica Ugwu is a writer for RegTech Global, with her enthusiasm for tech and business.


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