China's WeChat Suspends New User Registrations Amid Tech Crackdown

The government has privately owned tech giants in its sights for nationalization, analysts say.
By Qiao Long
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China's WeChat Suspends New User Registrations Amid Tech Crackdown People walk past the The headquarters building of Tencent, parent company of WeChat, in the southern Chinese city of Shenzhen, May 26, 2021.

Chinese social media platform WeChat has suspended new user registrations pending a security upgrade, its parent company Tencent said.

“WeChat is undergoing a technological upgrade and is expected to complete the upgrade and resume registrations in early August," the company said in a document cited by Reuters.

Online sources indicated that several other Chinese apps are also pausing new registrations.

A person familiar with internet regulation told RFA that the shutdowns were likely linked to fresh security requirements being imposed across the industry by the government.

A Zhejiang-based scholar surnamed Sun said the move comes amid a widening crackdown on homegrown tech giants by the ruling Chinese Communist Party (CCP) that has seen government regulators from multiple departments move into the headquarters of tech companies including Alibaba, in the name of "antitrust" operations.

"They are calling it antitrust, but that's not really what this is," Sun said. "Tencent is privately owned, and the authorities aren't going after state-owned enterprises, so it's more about expanding the state-owned economy at the expense of the private sector."

Tencent's share price fell by nearly nine percent in Hong Kong on Tuesday, losing around one fourth of its value since the beginning of July.

Pop-up screens

The suspension of new WeChat registrations comes as the ministry of information and industry issued a list of tech companies whose apps had bombarded users with an unacceptable number of pop-up screens.

"Issues such as open-screen pop-up messages that harass users have been the subject of strong complaint by users," the ministry said in a statement on its website. "We urge enterprises to pay attention to user demands, and resolve the issue ... of images, videos, and so on that deceive and mislead users."

"The ministry recently conducted a review ... and found that some companies still had issues that had not been completely resolved," it said, listing 14 apps that hadn't strictly implemented its guidelines on pop-ups.

"The listed apps should complete rectification work before Aug. 3," the notice said. "If it is not, the ministry ... will take steps to dispose of them."

And the national administration for market regulation issued an anti-monopoly penalty for Tencent Music, requiring it to end its exclusive streaming rights arrangements and pay a fine of 500,000 yuan.

It said the company had gained a higher market share by merging with its competitors, owning more than 80 percent of exclusive music streaming libraries, and affecting competition.

Nationalization goal

Internet activist Song Ying said that the authorities are pursuing privately owned tech giants with a view to eventual nationalization.

"First they have taken away their ability to raise foreign funds, with the ultimate goal of nationalization," Song said. "There are no state-owned companies right now in the most profitable and popular sector."

"They will start by running a [nationalization] pilot in one of the less prominent sectors, then they will speed up the process with large-scale mergers," he said.

Henan-based scholar Wang Li agreed.

"The government has its eye on their capital, as well as the extent of their reach [to the general population]," Wang told RFA.

"The most important of Tencent's assets is WeChat, which is an excellent tool for brainwashing people," he said.

"So many people are on it, that they are bound to take it over soon."

Translated and edited by Luisetta Mudie.


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