WeChat, the most popular messaging app in China, now warns users that it actively stores a whole range of private data and will readily share them with the Chinese authorities if needed. (Matthew Robertson/Epoch Times)WeChat, the most popular messaging app in China, now warns users that it actively stores a whole range of private data and will readily share them with the Chinese authorities if needed. (Matthew Robertson/Epoch Times)

China’s most popular messaging app WeChat now warns users in a privacy statement about how much of their private data the company shares with the Chinese regime. To no one’s surprise, it’s just about everything users type into the app.

Developed by the Chinese internet company Tencent, WeChat is China’s equivalent of WhatsApp and is used by 662 million mobile users, which makes it the dominant messaging app in China and one of the largest in the world.

WeChat users who updated to the latest patch are greeted with a new prompt that requires them to accept the privacy policy in order to continue using the app. Upon careful reading, the new privacy policy acknowledges that WeChat collects a whole range of data from its users, and to comply with “applicable laws or regulations” would readily share them with the Chinese regime.

Private log data from users such as “information about what you have searched for and looked at while using WeChat,” and “people you’ve communicated with and the time, data and duration of your communications” are among the things that WeChat freely stores and uses to customize advertisement and direct marketing.

WeChat users who updated to the latest patch are greeted with a new prompt that requires them to accept the privacy policy in order to continue using the app. (Screenshot captured by Twitter user @lotus_ruan)

WeChat users who updated to the latest patch are greeted with a new prompt that requires them to accept the privacy policy in order to continue using the app. (Screenshot captured by Twitter user @lotus_ruan)

WeChat also admits that it would “retain, preserve or disclose” users’ data to “comply with applicable laws or regulations.” Because China’s law enforcement agencies and security apparatus do not need a search warrant to seize a citizen’s property or private data, the Chinese regime would essentially have access to just about everything WeChat users send through the app.

Users who refuse to accept the latest privacy policy would be unable to access WeChat with their accounts, until they change their mind and click the “accept” button. However, because users can resume using the app anytime with their pre-existing data intact, WeChat likely plans to store all the data for a prolonged period, even when a user explicitly refuses to let WeChat manage his or her own data anymore.

The new privacy policy contains few surprises for those that have long been criticizing WeChat for lacking privacy and security protections for its users. After all, observers have attributed the dominance of WeChat in China to the company’s close collaboration with the Chinese regime in implementing self-censorship and surveillance mechanisms in the app.

WeChat certainly got an assist from the Chinse regime when it started a partial blocking of WhatsApp in July. The blocking of WhatsApp eliminated one of the few remaining messaging apps available for users in China that was not controlled by the authoritarian regime.

The Chinese regime also recently announced on Sept. 7 a new regulation mandating that the participants of WeChat message groups be responsible for managing the information posted in their respective groups. Essentially, this means that a user in a message group could be held liable and even persecuted for information that others post in the group.

It has long been noted that WeChat is among the most heavily censored messaging apps. A 2016 survey done by Amnesty International that ranks the world’s most popular messaging apps in terms of privacy protection for users gave WeChat a score of 0 out of 100, meaning that users of WeChat receive little or no encryption protection for their communications and the app is completely exposed to censorship and surveillance by the Chinese regime.

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For most people of the internet generation in China, conversations with friends involve pinging them via WeChat, the messaging platform by Tencent Holdings.
Need to pay for a latte at the coffee shop? It’s as easy as firing up WeChat Payments on the smartphone, and it’s done.
And when it’s time to apply for a loan for your small business idea, naturally, there’s a Tencent app for that.
The service is called WeBank. Approved by regulators in early 2015, it was the first online-only bank approved by Chinese regulators.
Small Loans for Small Businesses
In 2015, online banking has become the new battleground for Chinese internet giants.
WeBank and Alibaba Group Holding Ltd.-backed MYbank are competing to offer loans and investment products online.
Beijing is approving online-only private banks in an effort to diversify the banking industry and spur business growth. In the past, Chinese banks were all state-owned. They primarily catered to larger, state-owned enterprises (SOEs) or governments. Small, privately owned companies and individuals with limited collateral have long struggled to obtain credit from large banks.
Economists say small and medium-sized businesses generate three out of every four new jobs in China. With SOEs contracting or consolidating, Beijing desperately needs private and smaller businesses to help deliver on its economic and jobs growth targets.
Uniquely Equipped
Online-banking platforms are uniquely equipped to offer loans to consumers and smaller businesses.
Alibaba’s Alipay online-payment platform has more than 400 million active users. WeChat boasts 549 million active users. These consumers already use internet and their mobile devices on a daily basis.
Online banks affiliated with the “Big Three” internet giants Baidu, Alibaba, and Tencent hope to mine the troves of behavioral, geographical and financial data they already collect from existing services to screen borrowers for credit worthiness.
With social platforms, online stores, and web portals catering to hundreds of millions of existing daily users, online banks affiliated with these internet giants have access to marketing and advertising platforms that few brick-and-mortar banks could hope for.
WeBank received its banking license in January 2015. MYbank, the online-only arm of Ant Financial, the financial services arm of Alibaba, launched soon thereafter.
Last month, Baidu and Citic Bank announced plans to set up a joint venture bank to offer loan and investment products online. As of early December the application has not yet been approved by regulators.
Tencent is the largest shareholder in WeBank at 30 percent. Other major shareholders in WeBank include Shenzhen Baiyeyuan Investment and Shenzhen Liye, each with a 20 percent stake, according to data from Bloomberg.
These online banks offer consumers financial services products such as money-market funds, investment products, and loans. Without storefronts and overhead, online-only banks compete by having a lower cost base to brick-and-mortar banks.
“At a traditional bank, business has to go through several departments, resulting in additional costs,” Zheng Xinlin, a WeBank vice president, told Caixin Media. “Ours is a low-cost, one-stop service.”
As of September, WeBank had underwritten more than 1 billion yuan ($156 million) worth of consumer loans, 40 percent of which were for employees of Tencent, according to sources who spoke to Caixin.
Big Hurdles Remain
While internet firms believe online banks can provide much-needed capital for consumers and small businesses, regulators could be dampening those hopes.
Beijing has moved to rein in the lightly regulated market of online payments—an area that can affect the ability to transfer money into and out of online banks.
Draft rules issued in August by the People’s Bank of China put restrictions on online payment services such as Alipay and WeChat Payments. New guidelines would limit fund transfers, cap the amount of total daily transactions, and increase the requirements to provide identification when opening accounts.
The last rule would require applicants to give documentation such as educational background, tax bureaus, and bank accounts in order to open online accounts offering more than the most basic services.
Some critics warn these regulations could stifle development in one of the most innovative corners of the Internet.
Outside of government hurdles, competitive pressures have kept Internet-only banks from fully taking off.
WeBank’s first year in operation has been a rocky one. Under current Chinese banking rules, customers must physically provide identification at a real bank branch in order to make deposits. At launch, WeBank partnered with China Merchants Bank, the nation’s sixth-largest lender, to accept bank applications.
But in September, China Merchants Bank ended its relationship with WeBank and has refused to let its customers link accounts to WeBank’s online platform. Some of China’s biggest state banks have also declined to partner with WeBank, according to Caixin sources. Later in the month WeBank’s president, Cao Tong, resigned after only ten months on the job.
WeBank and Mybank hope facial-recognition technology will allow the firms to remotely verify identities without the need to visit a physical bank branch. But so far, regulators have not approved such technologies.

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Beijing and Shanghai may lie almost 1,000 miles apart, but their metro riders share one thing in common. Each morning, commuters hunch over smartphones or tablets to watch the latest Chinese or Korean TV drama or Hollywood movies downloaded from the internet.
Chances are, those videos are downloaded or streamed for free—via legal means or pirated.
But that may be set to change. Internet and media giants are making massive bets in content and technologies, aiming to disrupt China’s longstanding culture of free web entertainment.
Their goal: encourage people to pay for content.
Appetite for Videos
China’s online video market is expected to reach RMB 36.8 billion (US$5.8 billion) in 2015, a 50 percent increase from 2014, according to iResearch, a Chinese internet consultancy. Around RMB 15.2 billion of that figure comes from online video advertising, with the remainder consisting of subscriptions and purchases.
While that’s seems high, online video is still a small portion of the RMB 209 billion (US$32.9 billion) Chinese internet users expect to spend in overall online entertainment, which includes music and games.
This fragmented environment cemented China’s reputation as a market where copyrights go to die.

The gap is apparent when taken into context with how users spend their time online. As of June 2015, Chinese Internet users spent 33 percent of their time on the web on online videos. That’s by far the biggest chunk of time spent on online entertainment activities—social networking was 10.6 percent, and online gaming was only 5.9 percent. The remainder was spent on non-entertainment online activities.
In other words, revenues from online videos aren’t commensurate with usage demand. China has more than 650 million internet users, and monetizing the online video market has become an arms race between domestic internet giants.
Wild Wild West
The question is, how to convince millions of Chinese web users to pay for content?
In the United States, Hollywood movies generally follow the same distribution model. Films are shown in cinemas first, followed by DVD, Blu-ray, and streaming/on-demand platforms. Netflix, Amazon.com, and Hulu are the major players in online paid streaming video.
Media and entertainment giants view China as the new frontier. And in many ways, it’s still akin to the “Wild Wild West.”
No specific distribution channel is customary for domestic Chinese movie releases. Studios may choose to debut films and TV shows on any number of distribution channels including online and mobile. Legal streaming services are numerous and fragmented, coexisting with a number of sites streaming low-quality pirated content.
This fragmented, free-for-all environment encouraged the rampant piracy that has plagued Chinese entertainment industry in recent decades, and cemented China’s reputation as a market where copyrights go to die.
Arms Race
There are new sheriffs in town. The impending culture shift is led by the “BAT,” China’s big three internet giants of Baidu, Alibaba, and Tencent.
Their strategy is to create online platforms with libraries of high-quality and desirable content in high definition, able to be streamed or downloaded on-the-go. With a compelling product, they—and Hollywood studios—hope some users would move from illegal sites to these paid platforms. The services will be promoted alongside the internet giants’ existing products—think Taobao, WeChat, and QQ—which already dominate the social lives of Chinese internet users.
“The generation of users born post 1990 understands the value of content. They are cash-rich, but time-poor. They are willing to pay for the convenience of accessing quality without having to go through the complications of finding illegal content,” Yang Xianghua, senior VP of iQIYI, said in an interview with Variety magazine.
Alibaba, which runs e-retailer Taobao and its namesake internet wholesaler website, is spending billions in this effort. On Nov. 6, Alibaba agreed to pay around US$4.4 billion to purchase the remaining stake of Youku Tudou it doesn’t already own. Youku—a Chinese cross between YouTube and Hulu—hosts a number of well-known video bloggers, has a huge user base, and can drive traffic to Alibaba’s more lucrative online video ventures.
One service standing to benefit is Tmall Box Office, a streaming service launched by Alibaba earlier this year. Similar to Netflix, it requires monthly or annual subscriptions and offers a mix of Chinese and foreign movies and TV shows. Payments (around US$6 for the monthly plan) can be conveniently made via—you guessed it—Alipay, the company’s online payment service.
Taking a page out of Netflix’s playbook, Alibaba is also turning itself into a movie studio. Hong Kong-based Alibaba Pictures was launched in March 2015 to produce Chinese-language TV shows and movies. It also invests in large-scale Hollywood productions—in June Alibaba signed a deal to invest an undisclosed amount in the next “Mission: Impossible” film. Last year the company obtained rights from Lionsgate to broadcast and stream movies such as “The Twilight Saga” and TV shows such as “Mad Men” and “Weeds” in China.
Baidu, China’s No. 1 search engine, also built its online video platform iQIYI into a major player in content streaming. Last month, iQIYI signed an agreement with Comcast Corp. to become the exclusive online distributor of Universal Studios’ new and existing films in China.
comc, which owns China’s biggest social media platforms QQ and WeChat, reached an agreement last week to become the exclusive online distributor of Paramount Pictures’ future releases including “Star Trek Beyond,” set to debut in 2016. The company also acquired online distribution rights to Metro-Goldwyn-Mayer’s James Bond franchise, including the newly released “Spectre.”
It already has a war chest of popular western films. Tencent owns online distribution rights to Walt Disney’s “Star Wars” franchise, Time Warner’s HBO properties, and recently acquired an equity stake in the upcoming movie adaptation of video game “Warcraft.”
For Hollywood studios, China has long been a flawed market. Studios frequently face off against Beijing’s censorship police, which demands content alterations before release. Even after films are approved, box-office receipts are the only material form of revenues for studios. DVD and Blu-ray sales are virtually nonexistent due to rampant piracy.
To make up for this gap, U.S. studios see digital distribution as a potential new revenue stream in China. Timing will largely follow the U.S. distribution model. For example, MGM’s latest Bond film “Spectre” will be

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