WeChat ban on hold: Why that’s good for real estate

Real estate investors use app to find and invest in property

National /
Sep.September 21, 2020 02:45 PM
President Donald Trump (Credit: livier Douliery - Pool/Getty Images)

President Donald Trump (Credit: livier Douliery – Pool/Getty Images)

WeChat users facing a U.S. ban of the social media app starting Sept. 20 got an 11th-hour reprieve from a California judge, who ruled the edict may violate their First Amendment rights.

In a ruling Sunday, Judge Laurel Beeler granted an injunction against President Trump’s executive order banning WeChat from operating in the U.S. In the ruling, she said there were serious questions about whether the ban is constitutional.

The Trump administration has said WeChat, which is owned by the Chinese company Tencent Holdings, poses a national security threat by collecting data from users. The president signed an executive order banning WeChat, as well as the popular app TikTok, on Aug. 6.

On Monday, the U.S. Department of Commerce said it would challenge Beeler’s injunction.

Trade experts and others said the bans could have a chilling impact across several industries, including real estate.

WeChat is a key way for Chinese individuals to find and invest in U.S. property.

“A lot of people cannot fanqiang using a VPN,” Daniel Chang, an agent at Sotheby’s International Realty, told The Real Deal last month, using the term for scaling the “Great Firewall” of China. “If you’ve lost WeChat, you’ve lost everything.”

Experts said the move may also dampen interest in U.S. property among Chinese institutional lenders and investors, who have pumped billions of dollars of debt and equity into the market over the past decade.

The U.S.-China trade war has already taken a toll on commercial real estate. Beijing’s strict capital controls, enacted last year, put an end to record deals here. Chinese investment in U.S. property plunged to $827 million last year, compared to $19.5 billion in 2016, according to Real Capital Analytics. In 2019, Chinese investors sold more than $20 billion worth of real estate, RCA data show.

The U.S. WeChat Users Alliance, which opposed the Trump administration’s ban and filed a motion for preliminary injunction Aug. 27, called Sunday’s ruling an “important and hard-fought” victory.

“Never before has a president sought to ban an entire social media platform — used by a minority community to communicate — with such discriminatory animus and haste,” Thomas R. Burke, the group’s lawyer, told the New York Times. Since 2014, WeChat has been downloaded 22 million times in the U.S.

The injunction was the latest move in a standoff between the U.S. government and the makers of WeChat and TikTok. As of Friday, the Commerce Department was set to ban both apps from American app stores starting Sunday. But on Saturday, President Trump approved a deal by Oracle and Walmart to buy a minority stake in TikTok.





    Related Articles

    arrow_forward_ios
    Make Greenland Great Again? Trump wants to buy Arctic territory
    Make Greenland Great Again? Trump wants to buy Arctic territory
    Make Greenland Great Again? Trump wants to buy Arctic territory
    Hamptons’ priciest summer rental to host MAGA extravaganza next month
    Hamptons’ priciest summer rental to host MAGA extravaganza next month
    Hamptons’ priciest summer rental to host MAGA extravaganza next month
    Allen Weisselberg, Donald Trump (Getty)
    Trump Org convicted of criminal tax fraud
    Trump Org convicted of criminal tax fraud
    Quara Holding CEO Ziad El Chaar and Donald Trump  (Getty, LinkedIn)
    Trump Organization signs licensing deal with Saudi developer
    Trump Organization signs licensing deal with Saudi developer
    Letitia James and Donald Trump (Getty)
    Trump Organization sues AG in Florida, is slapped with monitor
    Trump Organization sues AG in Florida, is slapped with monitor
    Attorney General Letitia James and Donald Trump (Illustration by The Real Deal with Getty)
    Trump Org to AG: We don’t need no babysitter
    Trump Org to AG: We don’t need no babysitter
    Tish James and Donald Trump (Illustration by The Real Deal; Getty)
    Trump Org forms Delaware company, and AG suspects asset shelter
    Trump Org forms Delaware company, and AG suspects asset shelter
    From left: Letitia James, Donald Trump, Eric Trump, Ivanka Trump, Allen Weisselberg, and Donald Trump Jr. (Photo Illustration by Steven Dilakian for The Real Deal with Getty Images)
    NY AG files civil fraud suit against Trump, children and company
    NY AG files civil fraud suit against Trump, children and company
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...