Tencent shares slump on Trump's WeChat order
Chinese tech and media giant Tencent saw $30bn (£22bn) wiped off its value on Friday after Donald Trump escalated tensions with Beijing by announcing a ban on its social media app WeChat.
Shares in the company plunged by as much as 10pc on the news of the order, which at first had appeared to cover all of Tencent's operations including its vast gaming portfolio.
However, a US official later clarified that the executive order would only cover the company's messaging app WeChat, and Tencent regained some ground, down by around 4pc in Hong Kong.
The move sees WeChat grouped together with viral video app TikTok, which has been at the centre of US concerns for some time.
Mr Trump has repeatedly cautioned he would be looking to ban TikTok, although should a deal with Microsoft complete over its US operations, the app is expected to escape the ban.
The executive orders were vaguely worded, prompting some confusion over what they would cover. They appear to centre around how US data can be fed back to the Chinese government - something that may no longer be an issue with US owners.
Mr Trump said he was signing the executive orders on both WeChat and TikTok because "additional steps must be taken to deal with the national emergency with respect to the information and communications technology and services supply chain".
He said: "The spread in the United States of mobile applications developed and owned by companies in the People's Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States."
US companies have 45 days to stop doing business with both WeChat or TikTok, he said. Other Chinese firms also took a hit on the stock markets on Friday, with Alibaba and Taiwan Semiconductor Manufacturing sliding.
The move rippled around Asian markets, with investors concerned about increasingly bitter relations between the economic titans that some fear could lead to a renewal of their painful trade war. Overall, the sell-off saw more than $100bn wiped off the value of Chinese firms listed in Hong Kong.
"This is yet another watershed moment in the US-China technology cold war," Paul Triolo, head of global technology policy at Eurasia Group, told Bloomberg. "It shows the depth of the US concern."
The ban signals a worsening of relations between the US and China, following recommendations from the White House yesterday for Chinese firms to be delisted from US stock markets unless they met accounting standards.
Beijing slammed the move as "arbitrary political manipulation and suppression" and said it would come at the expense of American users and companies.
In a statement TikTok vowed to "pursue all remedies available to us in order to ensure... our company and our users are treated fairly – if not by the Administration, then by the US courts."
It said the order "risks undermining global businesses' trust in the United States' commitment to the rule of law, which has served as a magnet for investment and spurred decades of American economic growth. And it sets a dangerous precedent for the concept of free expression and open markets."
A spokesman for Tencent said the company was reviewing the executive order to get a full understanding.
