Interference and unreliable signals were once restricted to mobile phone black spots. They are now features of Chinese tech too. Donald Trump’s parting gifts to the sectors include a move to ban Chinese finance apps. Among them is Alipay, a payment service app from Ant Group, whose parent Alibaba is already under political assault.
Mr Trump’s last-minute executive orders lack traction as the red of a Republican presidency bleeds into Democrat blue. Joe Biden could revoke the decrees or implement them differently. The uncertainty is reflected in dithering by the New York Stock Exchange over whether to delist phone giants China Mobile, China Telecom and China Unicom.
It is evident in share price swings too, though the main listings of China’s three largest telecom operators are in Hong Kong. Shares of China Telecom are down a fifth since Mr Trump first drafted a blacklist banning US investment in companies with links to China’s military. The state-run telecom operator has negligible business in the US.
Similarly, the ban on Chinese apps is targeted at services such as Alipay and Tencent’s QQ Wallet that are little used by Americans. Most of Alipay’s more than 1bn users are in China. Chinese tourists have been the biggest users of the platform outside China. They have mostly stayed at home since the start of the pandemic.
Ant and Alibaba would suffer little immediate top-line damage. US businesses face disruption to cross-border payments if they can no longer connect with payment systems ubiquitous in China. The Chinese businesses would, however, miss out on possible US growth. Doubts over the security of user data may hurt them in other markets too.
The app ban is so belated it would take effect after Mr Biden is inaugurated as president. The Democrat is unlikely to seek a full rapprochement with China, which is unpopular with voters. What he can do is clarify whether he will roll back executive orders targeted at Chinese business, and if not, how he will implement them.
This would reassure bewildered investors, who are best served by clear, principles-based regulation. It would demonstrate the US is no longer a country ruled with a whim of iron by a would-be strongman. The contrast with China, as it cracks down on Alibaba, would be obvious.
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