China’s tech industry is having a rough time right now. The stock price of China’s tech juggernaut, Tencent, lost 5.04% on Friday morning after America’s President Donald Trump issued executive orders targeting TikTok and WeChat.
The Hang Seng Tech index, which tracks the 30 largest technology companies listed in Hong Kong that pass the screening criteria, also fell 2.51% to close at 7,386.66. On Mainland China, the Nasdaq-style start-up board Chinext slipped 2.065% on the day to about 3,059.87.
Note that WeChat, which belongs to Tencent, and TikTok whose parent company is ByteDance, are both based in China.
What happened: President Trump, yesterday, issued directives banning any U.S. transactions with the Chinese tech firms —Tencent and ByteDance. The ban will take effect in 45 days and could attract retaliation from the Chinese.
According to Trump, WeChat “automatically captures vast swaths of information from its users. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information.” He went on to say that the application also captures personal information of Chinese nationals visiting the U.S.
China’s response: China’s foreign officials disclosed on Friday at a media briefing that it was strongly against President Trump’s executive orders. It said that China will defend the legitimate rights and business interests of China according to foreign ministry spokesman Wang Wenbin.