US President Donald Trump has signed an order banning US transactions with eight digital Chinese payment platforms including Ant Group’s Alipay in 45 days, when he’ll no longer be in office.
The order is the outgoing administration’s latest bid to use national security powers against China’s technology companies, but it will be up to President-elect Joe Biden to decide whether to enforce the policy.
The executive order, which directed the US commerce department to draft rules outlining which payments will be outlawed, will impact Tencent Holdings’ QQ Wallet and WeChat Pay, as well as CamScanner, Shareit, VMate and WPS Office.
The order is likely to face legal challenges similar to those mounted against the president’s prior efforts to force the sale of TikTok from China-based owner ByteDance and ban WeChat’s messaging app. But Biden could also pause or erase the policy upon taking office.
Apps like WeChat Pay and Alipay have their biggest customer base in greater China and the number of users in the US is relatively small.
The order is the latest blow to Ant co-founder Jack Ma, who has not been seen in public since Chinese regulators halted Ant’s US$35-billion IPO and launched an antitrust probe into Alibaba.
Trump’s order, which cites concerns that the platforms threaten national security, could significantly disrupt international commerce systems working across international borders.
Senior administration officials said they believe the move could help stop the encroachment of Chinese data collection and prevent personal information like texts, calls, and photos from being gathered by an adversary.
But they didn’t identify specific instances of data theft using the applications. Instead, they pointed to the size of the payment platforms, saying their scope made them likely targets for Chinese data collection efforts.
“The Chinese government requires that all commercial companies, big and small, support the Chinese Communist Party’s political objectives,” national security advisor Robert O’Brien said in a statement.
Commerce secretary Wilbur Ross issued a statement saying he has directed his department to carry out the order. “I stand with President Trump’s commitment to protecting the privacy and security of Americans from threats posed by the Chinese Communist Party,” he said.
The 45-day timeline mirrored a similar period in the WeChat and TikTok executive orders, according to one of the officials who briefed reporters on the condition of anonymity, and there was no consideration of accelerating the implementation before the end of the administration. The Trump administration hasn’t briefed Biden’s transition team about the order, the official said. — Reported by Justin Sink and Jennifer Jacobs, (c) 2020 Bloomberg LP