China’s Tencent, the world’s largest gaming firm, downplayed President Donald Trump’s executive order when it reported its second quarter results on Wednesday. It saw a 37% rise in profits.
The tech giant runs an equal messaging platform in China called Weixin which it hopes will not be affected.
The bigger effect may be Apple’s sales in China if its iPhones aren’t granted permission to download Chinese messaging apps.
WeChat has more than one billion users worldwide but says the U.S only accounts for 2% of its revenue.
Last Friday, Trump demanded U.S firms to refrain from doing business with both WeChat and TikTok within 45 days citing national security concerns.
The TikTok prohibit was anticipated but still “shocked” the company’s owners ByteDance. WeChat, and its parent company Tencent, also discovered itself caught in the crossfire of the growth tensions between the U.S and China.
“If you look at the executive orders from May 2019 and then obviously the executive order a couple of days ago, they specify very clearly they cover US jurisdiction, and consequently we don’t see any impact on companies advertising on our platform in China,” said James Mitchell, Tencent’s chief strategy officer.
Business analysts are unsure about the full consequence of the US bans on Tencent and ByteDance, and awaits for more information.
There are fears that Apple could suffer if the prohibit continues to its operations in China. Experts say sales of its iPhone will be affected if Chinese consumers are banned from downloading messaging apps like Weixin onto them.
The executive order said it would ban “any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States, with Tencent Holdings Ltd. (a.k.a. Téngxùn Kònggǔ Yǒuxiàn Gōngsī), Shenzhen, China, or any subsidiary of that entity.”
President Donald Trump said that the increase in the U.S of mobile apps developed and owned by Chinese firms “threaten the national security, foreign policy, and economy of the United States”.
Bloomberg made the calculations and the Chinese market is worth around $44bn (£33.7bn) a year to Apple.