[Asia Economy Reporter Kwon Jae-hee] On the 6th (local time), after U.S. President Donald Trump signed an executive order aimed at banning China's 'national messenger' WeChat, the market capitalization of Tencent, the Chinese operator of WeChat, instantly evaporated by more than 80 trillion won.
On that day, President Trump signed an executive order prohibiting all transactions within the United States after 45 days against Tencent, which operates WeChat, along with ByteDance, the parent company of TikTok. This essentially means that WeChat will be expelled from the U.S. after 45 days.
Accordingly, on the 7th, Tencent's stock price on the Hong Kong stock market plunged more than 10% during the day, reducing its market capitalization by as much as 80 trillion won.
According to Bloomberg News, before the plunge on that day, Tencent's market capitalization was $686 billion (approximately 813 trillion won), ranking 8th in the world.
The concept of the 'transaction ban' mentioned by President Trump is still ambiguous, but the market is spreading concerns that Tencent will become a target of the U.S., following Huawei and ByteDance, and face difficulties in various businesses.
As of January, the number of WeChat users was 1.15 billion, effectively monopolizing the Chinese messenger market.
Moreover, WeChat combines several essential daily services such as electronic payments and health codes for COVID-19 prevention, making daily life in China difficult without WeChat.
Some argue that since WeChat's overseas market share is not high and it is strongly domestic in nature, the impact on Tencent from the Trump administration's pressure may not be that significant.
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