Tencent's Global Empire

Tencent owns stakes in many American companies, such as Tesla, Spotify, and Snapchat; Their WeChat social network attracts a whole country.

With 1.2 billion users at home, WeChat has become the primary means of Chinese people to communicate, shop and pay. The combination of Facebook, WhatsApp, Instagram and Venmo services in one app gives WeChat the ability to do almost anything.

Tencent's sphere of influence does not end with social media. This company secretly invests in all sectors of the world digital economy. In the list of companies invested in by Tencent are Tesla, Spotify, Snapchat, Reddit, Uber, Lyft ...

The Chinese tech giant is also the world's largest game publisher, with strong ties to top US game companies, such as Activision and Electronics Arts. Tencent currently holds a majority stake in Epic Games, owns Riot Games - the developer of League of Legends.

Tencent is valued at nearly $ 700 billion and is one of the most valuable tech companies in China. CEO Pony Ma and many other executives of the company are members of the National Assembly of China.

Tencent's booth at the 5G exhibition in Beijing in 2019. Photo: Reuters.

What is WeChat?

WeChat is an all-in-one application. It is used so much that many Chinese are no longer interested in phone numbers or emails. In the US, brands both large and small use WeChat-embedded apps to transact with Chinese customers.

The fact that such an influential Chinese application is in the US makes President Trump unable to ignore it. On August 6, he signed an executive order banning WeChat because of national security concerns. This decision immediately "blown" $ 30 billion worth of Tencent in the market.

Neil Campling, an analyst at Mirabaud Securities, said: "The new move shows that Trump has set a 'time bomb' for the total technology war between the US and China".

It is not clear how Tencent will deal with the ban, however, Washington's move is seen as the next blow in the war with China, after Huawei and TikTok.

Will Tencent "Empire" collapse?

Tencent has invested in nearly 700 companies globally over the past 10 years, engaging in as many businesses as possible, according to data from analyst firm Technode. "Tencent has long invested in technology and game companies around the world. It helps many companies structure transactions and pave the way for products to penetrate the Chinese market," Campling said.

In addition to technology, the entertainment industry is also an important choice for Tencent. The company currently invests in major film and music studios, such as Warner Music, Sony Pictures, and Universal.

Tencent's demand for offshore capital investment stems from the fierce competition in China. The ban on US technology firms makes the country the exclusive playground of domestic companies like Alibaba and Baidu. In terms of capital investment alone, Tencent is ahead of other Chinese firms.

After the WeChat ban, many experts say Tencent is no longer secure. "President Trump's ban on WeChat would reduce Tencent's ability to maintain ownership of Western assets," wrote Bloomberg Intelligence analysts Vey-Sern Ling and Matthew Kanterman. In Europe, Tencent will have to plan to divest in more companies. ''

Many experts admit that the security concerns surrounding Tencent are justified. In China, WeChat is used by the police to spy on people and scale up the surveillance of the Chinese state.