- Tencent Holdings Ltd. has resumed signing up users for its WeChat messaging app, days after suspending registrations for unspecified technical upgrades.
WeChat, which already has more than 1 billion users, stopped signups last week to undergo a security technical update to comply with regulations. The company said at the time that it expected to resume new individual user registrations around August 1, 2018. A company representative confirmed consumer reports on social media about the resumption Thursday.
A series of state media pronouncements this week have stoked fears that Tencent will next focus on the gaming sector and its most powerful player Beijing. China's most valuable corporation fell as much as 11% after an item posted by the Xinhua News Agency called games spiritual opium' - a term since removed from online posts. The Communist Party’s flagship newspaper, the People's Daily, reinforced that rhetoric a day later but toned down the need to fight addiction, underscoring that reining in the giant industry remains a priority.
WeChat - a fixture in daily Chinese life for everything from hailing cab to ordering meal and paying utilities bills plays a central role in funneling traffic to and showcasing Tencent's businesses. Its services however largely wall off users on platforms operated by its rivals, such as Alibaba Group Holding Ltd.'s main shopping sites. The user suspensions only affect its global service, dubbed Weixin locally - which accounts for the bulk of its Chinese users.
The user suspensions coincided with a notice from the Internet Industry Supervisorr that warned it was kicking off a six-month campaign to rectify illegal behavior online, including the blocking of external links as well as collection and storage of data.
Read more: Tencent Bounces Back After State Media Soften Tone on Gaming.
Tencent was down more than 1% during the lunch break. Concerns about the gaming sector come after a few weeks of regulatory action against Didi Global Inc. and the $100 billion after-school tutoring industry that at one point wiped out more than $1 trillion in market value from Chinese stocks. Shenzhen-based Tencent responds to Tuesday's blistering critique, has promised to limit game time and even broached a nationwide ban on gaming for kids.
On Thursday, an influential newspaper based in Shenzhen - Tencent's home base - fanned uncertainty by arguing that the government should stop giving tax breaks to gaming companies because they've become global players that thrive on their own.
Beijing's campaign to rein in its giant internet industry enters its 10th month, a roller-coaster ordeal that is prompting nervous investors to ponder the longer-term implications of crackdown on firms from Meituan and Didi to Alibaba to Alibaba-backed food delivery giant Jack Ma.
Those actions demonstrated Beijing's resolve to go after powerful enterprises to address social inequities, seize control of data it deems crucial to the economy and stability, and die in private interests.