---
title: "Donald vs. China: tech is suffering"
description: Donald Trump is going to war with Chinese tech companies. Learn what that means for us in South Africa.
image: https://static.wixstatic.com/media/ff1754_db8c9ef2956846ec93b9841e688e3dc2~mv2.gif
---

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# Donald vs. China: tech is suffering

[![Donald vs. China: tech is suffering](https://static.wixstatic.com/media/ff1754_db8c9ef2956846ec93b9841e688e3dc2~mv2.gif)](https://static.wixstatic.com/media/ff1754_db8c9ef2956846ec93b9841e688e3dc2~mv2.gif)

Repurposed with permission from our friend at The Finance Ghost. 

[https://thefinanceghost.com](https://thefinanceghost.com)<https://thefinanceghost.com/>

 

Hot on the heels of a trainwreck interview with Jonathan Swan, Trump wasted no time in getting back to business: fighting with China. Whilst we certainly have enough of our own questionable politicians to deal with, the global superpowers are important too.

 

China has never been shy of censorship (no WhatsApp or Twitch in China) and Trump is now heading down the same road, signing an executive order to shut down WeChat and TikTok in the US in just 45 days. WeChat is China's most popular messenging app and offers a host of value-added services. It is owned by Tencent, which many South Africans have indirect exposure to via Naspers or Prosus. If you have a South African pension, I can almost guarantee that you are indirectly invested in Tencent. Unfortunately, Naspers and Prosus both dropped around 4% on Friday after the announcement out of the Trump administration.

![](https://static.wixstatic.com/media/ff1754_db8c9ef2956846ec93b9841e688e3dc2~mv2.gif)

 

 

 

 The issue is around security. The West is deeply suspicious of China and concerned about information privacy on Chinese apps and networks. Huawei has been in the cross-hairs for a while now, as the West shut it out of 5G network builds and Google threatened to stop supporting Huawei's Android phones. Interestingly, although WeChat isn't a popular app in the US (mainly used by Chinese people to stay in touch with friends and family back home - now a serious challenge), the bigger issue for Tencent could come later if Trump and crew go after the gaming side of the business. Tencent is one of the most important gaming companies in the world and that business is significant in the US. Good news for Microsoft? Microsoft has been courting TikTok's parent company (ByteDance) for a while now.

 

Microsoft doesn't own a truly scalable social media business (LinkedIn is never going to be Facebook). A Microsoft deal would appease the Trump administration and resolve the security concerns, allowing TikTok to continue being used in the US. It makes sense for Microsoft on paper, but the deal has gotten weird. Even Gates has referred to it as a "poisoned chalice" in an interview. Trump has essentially banned Facebook's main competitor and has suggested that the US Treasury must get a stake in TikTok going forward.

 

If you want to get up to speed with big tech, [check out this article from last week](https://thefinanceghost.us19.list-manage.com/track/click?u=9f28a11557b8a67cdd6e3030f&id=ceb5bf0476&e=24b46f7233) that looks at the quarterly earnings from the tech giants and some of the observable trends.

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