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WeChat ban could still have ‘enormous’ impact on US firms


After Apple warned the White House about the ‘severe’ implications of an overly broad WeChat ban, it now seems the iPhone maker may be safe from the worst-case scenario. But a business group has said that US firms doing business with China could still face ‘enormous negative impact’ …

The WSJ reports that the warning comes from the American Chamber of Commerce in Shanghai. They found that US businesses fear they will lose revenue if customers cannot pay via WeChat, but the consequences could be even more severe.

AmCham Shanghai, which includes firms such as Coca-Cola Co. and JP Morgan Chase & Co. among its 1,400 members, surveyed more than 140 corporates this month.

Should the ban extend to China and U.S. companies and citizens there, almost nine in 10 companies said the ban would hurt operations in China by hindering their ability to effectively communicate with staff and local authorities. More than half of those polled said it would result in a loss of competitiveness in the market, and 42% of the respondents say extending the WeChat ban to China would result in revenue loss […]

[The survey] showed there was no good alternative to WeChat in China, should the platform be banned. Facebook Inc.’s eponymous messaging app, Instagram and Twitter are blocked in China and Facebook-owned WhatsApp chat messenger is sporadically unusable. There is no comparable Chinese alternative […]

WeChat is seen as a necessity by the local government and Chinese authorities turn to the app when they seek to communicate with companies, the chamber said. It cited an example of how financial regulators often issued directives or window guidance to U.S. banks using the app, and how the chat messenger was critical for arranging meetings, as well as hosting functions that enable firms to make appointments for their business-license application and registration process.

Without access to WeChat, US firms with offices in China would be unaware of updated government requirements, and would thus risk inadvertently breaking the law – including on coronavirus mitigation measures.

Apple’s Chinese offices would face this risk, in addition to the company losing between 3% and 6% of global iPhone sales.

The White House has still not clarified the extent of the upcoming WeChat ban, beyond apparently offering private reassurance that it would not apply to iPhones sold within China. It remains unclear whether the Chinese offices of US companies can use the app.

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