WeChat suspends new registrations as it gets ‘security technical upgrade’
Investors have fled Tencent and its internet peers after China issued edicts governing illegal online activity and food delivery, among others
Tencent said on Tuesday that it was suspending new user registrations for its WeChat services, adding to uncertainty for the technology sector that’s in the midst of a two-day selloff.
WeChat, which already has more than 1-billion users, is undergoing a “security technical upgrade” in accordance with relevant laws and regulations, Tencent said in an online statement. It expects to resume new individual user registrations in early August.
Investors have fled Tencent and its internet peers over the past two days after China announced its toughest curbs to date on the online education industry and issued a series of other edicts governing illegal online activity and food delivery. Xi Jinping’s government has, over the past nine months, embarked on a series of crackdowns on China’s most influential private-sector companies over issues ranging from antitrust to data security, as it seeks to rein in the tech giants’ influence over most of everyday life.
WeChat — a fixture in daily Chinese life for everything from hailing a cab to ordering meals and paying utilities bills — plays a central role in funnelling traffic to, and showcasing, Tencent’s businesses. Its services, however, are largely walled off from users on platforms operated by its rivals, such as Alibaba’s main shopping sites. In its release on Monday, the tech-industry regulator said it was embarking on a campaign to rectify illegal behaviour online, including the blocking of external links as well as the collection and storage of data.
Tencent, the most valuable company in China, sank 9% on Tuesday, the most since October 2011. The social media and gaming giant has lost more than $100bn in market value in the past two days, joining a slump in China’s biggest tech companies. Meituan, a Tencent investee, sank a record 18% Tuesday, in part as the antitrust regulator ordered food delivery platforms to ensure delivery drivers’ welfare.
Bloomberg News. More stories like this are available on bloomberg.com
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