Sources: Chinese government blocks major MetaTrader 4 port

Today, the Chinese Communist Party has convened in Beijing, and once again, the distribution of information and data via the internet and non-Chinese applications was high on the agenda.

So high on the agenda, in fact, that the government has now blocked access to Skype and WhatsApp, two very popular messaging services, so that access is now extremely restricted from within mainland China.

This was inevitable, and FinanceFeeds made a full report on this today, which can be read by clicking here.

Whilst this perhaps makes sense, as WeChat is now the de facto method of communication between Chinese businesses, and has increasingly been an equally vital communication means for businesses outside China when working with Chinese partners, a further and more grave situation has occurred today also.

FinanceFeeds has received several communications from brokerages in mainland China which have service from suppliers outside of China, stating that the HTTP protocol over TLS and SSL, known commonly as ‘443’, which is a port used for secure web browser communication and is a major connection methodology for MetaTrader 4, has been blocked by the government.

This is a port which is used to connect MetaTrader 4 to trading servers, hence several brokers are now unable to connect from within mainland China.

One of the facets of port 443 is that data transferred across such connections is highly resistant to eavesdropping and interception, hence it is more difficult (although not impossible given China’s sophisticated firewall system) for the government to monitor the flow of data and trading dynamic between Chinese companies and their overseas suppliers given this topography.

Moreover, via the use of port 443, the identity of the remotely connected server can be verified with significant confidence. Web servers offering to accept and establish secure connections listen on this port for connections from web browsers desiring strong communication security.

Once established, web browsers inform their users of these secured connections by displaying an icon — a padlock, an unbroken key, etc. — in the status region of their window. FinanceFeeds was established by experts in the field of institutional connectivity, thus this is a protocol on which our level of understanding is very high.

This is ideal when operating in a free market, however by blocking it, China rids itself of the lack of transparency and ability to monitor the traffic, but also creates a complete inability for some firms to operate their trading platforms.

FinanceFeeds can verify that this restriction has not affected all users of MetaTrader 4 in China, as currently, brokerages which are using MetaTrader 4 and are being supplied with liquidity and connectivity by Western firms with a Chinese base with all of their trading infrastructure hosted on Chinese servers are still operational, and given the government’s ability to scan data at server and hosting level within China, it is likely that these will never be affected.

Conversely, brokerages using connectivity partners or white label providers with no Chinese presence at all risk being completely disconnected from their trading server.

One firm in China explained to FinanceFeeds today “Our clients are fine for the moment, but we are making a back up plan immediately.”

The nature of the usage of the port by brokerages has traditionally been for MetaTrader 4 terminal communication, hence it is vital for the operation of a retail brokerage, however it is clear that China’s government has realized the freedom of information transfer that it provides.

FinanceFeeds will continue to monitor this and report on it as it continues, and will also be happy to advise brokerages on how to mitigate this, should the need arise.

One thing is clear, however, that being the absolute necessity for Western brokers, providers and vendors to have a Chinese entity which is hosted, partially owned and operated from within China.

Those who have already done so and are established within the mainland will stand in very good stead indeed.