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US bans pay apps of Chinese tech giants Alibaba and Tencent

U.S. President Donald Trump on Tuesday signed an executive order banning transactions with eight Chinese software applications, including Jack Ma-led Ant Group’s Alipay mobile payment app, according to a White House statement.

The order states that the United States must take “aggressive action against developers of Chinese software applications to protect national security.”

The Commerce Department has been asked to list which transactions will be banned under the directive within 45 days and targets Tencent Holdings Ltd’s QQ Wallet and WeChat Pay as well.
The order also names CamScanner, SHAREit, Tencent QQ, VMate which is published by Alibaba Group subsidiary UCWeb, and Beijing Kingsoft Office Software’s WPS Office.

“By accessing personal electronic devices such as smartphones, tablets, and computers, Chinese connected software applications can access and capture vast swathes of information from users, including sensitive personally identifiable information and private information,” the executive order states.
Such data collection “would permit China to track the locations of federal employees and contractors, and build dossiers of personal information,” it adds.

The order aims to entrench Trump’s strong line against China which Joe Biden will inherit as the new US President on Jan. 20. Bide has until now said little about how he plans to tackle the tech threats from China.
The directive follows Trump’s earlier executive orders signed in August directing the Commerce Department to block some U.S. transactions with WeChat and the Chinese-owned video app TikTok.

Had those orders gone into effect, they would have effectively banned the Chinese apps’ use in the United States and barred Apple Inc and Alphabet Inc’s app stores from offering them for download for new users.

The restrictions, however, were blocked by courts mainly on freedom of speech grounds. The White House is confident the new restrictions will stand up to judicial scrutiny, since applications like Alipay would struggle to bring a First Amendment case, the senior administration official told Reuters.
U.S. Secretary of Commerce Wilbur Ross said in a statement that he supports Trump’s “commitment to protecting the privacy and security of Americans from threats posed by the Chinese Communist Party.”

Ant is China’s dominant mobile payments company, offering loans, payments, insurance and asset management services via mobile apps. It is 33% owned by Alibaba and controlled by Alibaba founder Jack Ma, but is currently unavailable for American users.

Alipay was downloaded from Apple’s U.S. app store and Google Play 207,000 times in 2020, while image scanning app CamScanner and office suite app WPS Office were downloaded 4.4 million and 563,000 times respectively, according to research firm SensorTower.

The US had in November banned investment in alleged Chinese military companies including China’s top chipmaker SMIC and oil giant CNOOC. Last month, the Commerce Department added dozens of Chinese companies, including Chinese drone manufacturer SZ DJI Technology Co Ltd, to a trade blacklist..