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Aug. 13, 2020, 10:58 a.m. EDT

Here’s a better approach to dealing with WeChat’s privacy and misinformation offenses

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NEW YORK ( Project Syndicate )— Shortly after President Donald Trump issued an executive order effectively banning the Chinese-owned social-media app TikTok, he issued a second order prohibiting “any transaction that is related to WeChat by any person…as identified by the Secretary of Commerce.”

According to the White House, the WeChat ban—which will take effect on Sept. 20—is intended to protect Americans and visiting Chinese in the United States from violations of privacy by the Chinese government and to limit fake news from the Chinese government reaching Americans. But the ban is likely to be counterproductive, and there are better solutions to these problems.

WeChat, owned by Tencent, /zigman2/quotes/204605823/delayed HK:700 -0.30% a Chinese company listed on the Hong Kong Stock Exchange, is a widely used multipurpose app that combines messaging, social media, digital payments, and other functions. If Tencent’s founders, Pony (Huateng) Ma and four other partners, had built their company in the U.S., they would be celebrated in much the same way that Bill Gates, Jeff Bezos, and Elon Musk are.

Breaking news: U.S. companies lobby White House over WeChat

Chinese entrepreneurs likely have had to overcome much greater difficulties to succeed than their American counterparts. After all, funding for those without family wealth or political connections is scantier in China due to a less developed capital market. Property rights protection is weaker, and Chinese internet users’ purchasing power is much lower than that of Americans. In 1998, when Tencent was founded, China’s per capita income was a mere $850—less than 5% of the U.S. level and less than 20% of the Mexican level that year.

WeChat was introduced in 2011, and quickly grew to become China’s dominant social-media app. It is now a ubiquitous communications tool, used by young and old alike. Virtually every Chinese person with a smartphone has a WeChat account, which they use to stay in touch with friends, family, and work colleagues, and to pay restaurant, utility, and grocery bills.

Even the U.S. Embassy in China has an official WeChat profile , where it broadcasts US government information and provides services to U.S. citizens living and working in China.

U.S. residents with family members or friends in China are also likely to use WeChat when they communicate, and Chinese tourists in other countries rely on the app to stay connected while abroad. Similarly, many academics in the Chinese diaspora now use the service to collaborate with researchers in Singapore, Hong Kong, and mainland China (where it is used much more often than WhatsApp, Zoom, or Skype). 

Banning WeChat outright will thus disrupt the lives of many U.S. citizens and residents—probably on the order of 1 million people—who use the app regularly. Whether the move is worthwhile depends on if it serves some higher purpose effectively.

According to Trump’s order, WeChat is guilty of two offenses.

First, it collects mobility data and the content of communications from U.S. citizens, permanent residents, and visitors to the U.S. from China, and potentially makes this information available to the Chinese government. So, a ban protects people’s privacy.

Second, the Trump administration claims that disguised Chinese government entities are spreading disinformation on WeChat, in which case a ban would curtail Beijing’s ability to transmit propaganda.

Both these apparent benefits are illusory. The idea that a ban strengthens privacy rests on the assumption that WeChat users in the U.S. are stupid or uninformed, and thus cannot weigh the costs and benefits on their own. The implication is that Uncle Sam needs to strip away the right to download and use the app in order to protect users from themselves. The irony is that the ban comes from a president who declines to adopt a mandatory face mask requirement in public places during a viral pandemic, which would have saved American lives.

As for the claim about disinformation, there are two points to consider. First, given the Chinese state’s control of all media (online and off) within the country, WeChat is a relatively unimportant channel for the government’s message outreach. 

Second, U.S.-based users often share information with friends and family in China, who then may pass it along to other WeChat groups. That makes WeChat a crack in China’s Great Firewall. Even if a post is taken down by a WeChat censor, it is often reposted in some other form, and users regularly deploy creative wording and formatting in their messages to bypass the censoring algorithm.

By banning WeChat in the U.S., Trump is closing an important opening in the firewall.

An alternative three-pronged policy would be superior to a ban.

First, the president could order all U.S. government agencies and employees not to use WeChat, with the U.S. Embassy in China being the exception.

Second, the U.S. government could mandate that Apple /zigman2/quotes/202934861/composite AAPL +3.75% , Google, /zigman2/quotes/205453964/composite GOOG +1.17% and other U.S. app vendors issue a pop-up warning to anyone downloading WeChat. It could state that, “The U.S. government determines that this app may be used to track your movement and the content of your communication and that this data could be available to the Chinese government. Some advertisements on WeChat may come from the Chinese government.”

Third, the U.S. could order Tencent to stop sending push notifications or advertisements to any users whose accounts are registered with a U.S. phone number, or who are traveling in the U.S. This is easy to do technically, and Tencent would have an interest in complying with such a directive.

Because the U.S. commerce secretary must still define the prohibited “transactions” mentioned in the order, there is hope that the scope of the policy will be narrow enough to avoid some of the counterproductive consequences. But the three-pronged alternative approach would be even better.

Trump’s ban against WeChat owner Tencent could have huge implications for U.S. companies

Trump has no right to demand money from Microsoft-TikTok deal

Shang-Jin Wei, a former chief economist at the Asian Development Bank, is professor of finance and economics at Columbia Business School and Columbia University’s School of International and Public Affairs. 

<STRONG>This article was published with permission of <INTERNET LOCATION="EXTERNAL" URL="https://www.project-syndicate.org/">Project Syndicate</INTERNET>—<INTERNET LOCATION="EXTERNAL" URL="https://www.project-syndicate.org/commentary/trump-wechat-ban-costs-outweigh-benefits-by-shang-jin-wei-2020-08">A Better Alternative to Trump’s WeChat Ban. </INTERNET></STRONG>

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