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August 5, 2021updated 06 Aug 2021 2:59pm

WeChat resumes new user registration after mysterious ‘security upgrade’ hiatus

By Elles Houweling

Chinese tech titan Tencent has resumed new user registrations for its super app WeChat after it halted new sign-ups for “security upgrades”. The move raised concerns over the breadth and depth of Beijing’s ability to rein in Big Tech’s power.

Weixin – as WeChat is known in China – said last week that it would halt new user registrations while it upgraded its security to comply with “relevant laws and regulations”. However, the company did not clarify which law WeChat was conforming to.

The instant messaging app is the most popular mobile app in China, with more than one billion monthly active users. The platform is used for messaging, mobile payments, gaming and other financial services, making it an integral part of day-to-day life in China.

The suspension only applied to new registrations in mainland China and not those joining from overseas.

Following the news last week, the shares of tech giant Tencent took a beating. The company saw its stock price drop 9% when the news first broke, marking the worst single-day drop in a decade. At one point last Wednesday, the company’s share price was down another 5% before finishing largely flat at the close, the South China Morning Post reported.

The company’s shares took another hit earlier this week after a state-affiliated newspaper dubbing video gaming as “spiritual opium”. The comment spooked investors, as it raised speculations that Beijing would come after the gaming industry next.

The sudden suspension comes amid a wider crackdown on tech companies which involves stricter laws on how personal data is collected and stored.

Most recently, China’s internet watchdog blocked ride-hailing giant Didi Chuxing from adding new users. The Cyberspace Administration of China and Ministry of State Security removed the app from Chinese app stores a few days after the company debuted on the New York Stock Exchange.

Additionally, Beijing has also announced plans to bolster up its data privacy laws. It is in the process of drafting a Personal Information Protection Law aimed at making tech companies store data securely.

In September, it is due to implement its Data Security Law, under which companies processing “critical data” must conduct risk assessments. Those processing data deemed to affect Chinese national security must submit an annual review.

According to GlobalData’s senior analyst and China specialist Michael Orme, this is all part of Beijing’s ongoing battle with the country’s tech behemoths.

He said that while there are concerns from the state, particularly in the financial sector, Tencent and Alibaba are “crucial players in the evolution of the Communist Party’s mid-term economic policy”.

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