Tag Archive ChinaConsultation

WeChat: What is it and Why is it so Popular in China?

WeChat. It allows Chinese people to make payments, install other apps, and even write micro-blogs. Despite its popularity in the Chinese mainland, it is not often used in other countries for privacy issues. However, let’s get started with the fundamental question:

What is WeChat?

WeChat (微信) is a Chinese multi-purpose app developed by Tencent. First released in 2011, it has become the most popular app in China due to its numerous functions, despite it initially only sending instant messages. Why did WeChat grow so rapidly in popularity? The answer is simple: as an all-inclusive app which has no competition in mainland China, WeChat is the dream of every developer. WeChat’s ubiquity in Chinese society makes it a necessity for anyone even visiting for a short time, so make sure to download the app once you’re in China, otherwise you might not even be able to pay a taxi driver.

WeChat data statistics and insights - most popular app in China - 2019

Figure 1 Share of mobile users using the leading social media platforms in China as of October 2019

The poll above shows that in 2019, 73.7% of Chinese netizens frequently used WeChat, a percentage that can only have since increased, especially since the outbreak of the coronavirus pandemic has make virtual transactions so necessary. Furthermore, in addition to being sponsored by the Chinese government, China’s youth tend to use WeChat to buy music online. Some may think that there is no need for WeChat because other apps could take its place.
But remember to keep in mind the “Great Firewall”, that blocks Facebook, Google, Twitter and WhatsApp. As the versatility of WeChat grew, the need for other social media apps dropped. Instead of a messaging app like WhatsApp, the Chinese netizens have opted for WeChat; instead of Google Pay, they have opted for WeChat pay, and so on. That’s why and how the app developed by Tencent has become an all-inclusive dominant super-app for the Chinese users.

How safe is WeChat?

Unfortunately, this question has no easy answer. According to Tencent, the company does not track or store users’ data, as long as the Chinese authorities do not solicit such information.  For foreign and Chinese users, the situation might be different: “Overseas Users” are not obliged to follow the strict regulations applied to Chinese users. For example, a Chinese user can not receive a message containing sensitive words such as “Free Tibet”; in other words, the app monitors the messages and censors some keywords which might be perceived as threatening by the political regime. Therefore, foreigners can talk to each other about sensitive topics, such as the 1989 Tiananmen Square massacre, but the same messages can not be received by Chinese netizens.

How Safe is a WeChat account?

In order to get a WeChat account, one only has to register and join the app with a username and a password, thus your account is safe as long as you choose an effective password and you frequently change it. The management of data is a little bit more troublesome: all conversation history is stored locally on your device, which implies that if you change your phone you will have to manually transfer the data to your new device. But why is this troublesome? WeChat doesn’t provide users with end-to-end encryption but with transport encryption. The end-to-end encryption is widely used by western messaging apps and it allows only the sender and the receiver to see the message; whereas the messages sent with transport encryption might be read by third parties. Even though Tencent claimed that all messages, once delivered, are deleted on the server, they still are on your mobile. According to Chinese law, apps, blogs and online forums are accountable for the content of their website which includes what users have written, so were the government to ask, WeChat would hand them your data.

Is WeChat Pay safe?

Users’ credit or debit card  information is stored in a secure server. However, WeChat Pay works only in mainland China and few other countries. WeChat pay is the most popular payment method in China and it requires you to link a source of credit or (just for users with a Chinese bank account) debit card. You can send red envelope (hongbao), transfer money and pay for your groceries with WeChat Pay—no surprise that the app has come to be the emblem of China’s cashless society.

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How To Open a Bank Account in China

Planning to operate a wholly foreign-owned enterprise business in China, whether it be a small business, a global company, or even a Fortune 500 company, can be fairly effortful. It is essential to take all the precautions needed to for your business to be successfully established. Once you acquire a business license, there are more steps to be taken further, such as, opening a bank account in China, to assist your business affairs. Although this step is necessary and can sound simple, opening an account in China can be challenging, especially recently, as the regulations became more stringent.

As of April 2020, the People’s Bank of China (PBOC) have made it obligatory to follow high level of analysis during the Know Your Customer (KYC) process. Because of this, the PBOC have ordered that all banks not only to oversee business activities, including financial transactions, but also to induct a few other conditions such as investigating your other bank accounts in addition to dormant accounts, seek capital transitions, examine times of transactions as well as suspicious or abnormal activities, restrict pay outs and limit online banking transactions.

In order to open a bank account in China, one must acquire a few essential documents including:

  • Ownership certificate (lease contract or site certificate) 
  • Proof of utility or rent transfer voucher for the past month (must resonate with lease contract)
  • Original copy of company business license (official seal, financial seal, private seal of legal person) 
  • Original copy of ID card and company associated documents of the legal person

As the process of opening a bank in China can be lengthy and challenging, China banks advise that a legal representative is present in China through the process. Due to the travel bans, banks in China have made an exception in video applications, if all is well the bank will then approve of the proposed bank account. Aside from all of these processes, the person representing the company applying for the account will have to visit the bank with additional documents. The bank will then call and confirm the opening of the account. 

Additionally, various Chinese commercial banks are trying their best to aid new clients with alternate solutions such as organizing a virtual interview (with notarized documents from the Chinese Consulate or Embassy) to make the process more manageable. 

The challenges involved in setting up a WOFE can be interminable and demanding, feel free to reach out to us for a consultation!

+1 561 729 6508 | [email protected]

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