Saturday, May 18, 2024

Analysis: If the US bans TikTok, China will be getting a taste of its own medicine | CNN Business

Must read

Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


Hong Kong
CNN
 — 

TikTok is now facing a ban in the United States, a fate that has already befallen a string of American social media giants that tried to make it in China.

On Wednesday, the US House of Representatives passed a bill which could ban TikTok in the country if its Chinese owner ByteDance doesn’t sell the app to an entity that satisfies the US government.

“The bill passed by the US House of Representatives puts the US on the opposite side of the principle of fair competition and international economic and trade rules,” Chinese Foreign Ministry spokesperson Wang Wenbin said at a briefing Thursday.

But American apps have long been barred in China. Beijing currently blocks most US social media platforms — including Google, YouTube, X, Instagram, WhatsApp and Facebook — because they refuse to follow the Chinese government’s rules on data collection and the type of content shared.

In 2010, Google pulled out from mainland China after operating there for four years. It said at the time that it was no longer willing to continue censoring results on Google.cn, citing Chinese-originated hacks on it and other US companies.

More than 10 years after that high-profile retreat, the shoe is on the other foot, even if the circumstances aren’t exactly the same.

“The TikTok bill appears likely to become law and China’s displeasure seems ironic, if not hypocritical, given its stance toward American social apps,” said Brock Silvers, managing director at Kaiyuan Capital.

Asked about China’s stance on US apps, Wang said “this is completely different” and “you can clearly see what is bullying and what is gangster logic.”

The focus is now on the US Senate, where many lawmakers said they are still evaluating the legislation. President Joe Biden has said he will sign the bill if it reaches his desk.

US officials and legislators have long expressed concerns about TikTok’s potential national security risks, including that it could share data with the Chinese government, or manipulate content displayed on the platform. But TikTok has rejected the claims.

On Thursday, following the House vote, the Chinese Commerce Ministry pledged that the country would take “all necessary measures” to safeguard its interests regarding TikTok.

The Chinese government has said it strongly opposes a forced sale of TikTok, and it has the legal ability to do so. It views TikTok’s technology as highly valuable and has taken steps since 2020 to ensure it can veto any sale by ByteDance.

U.S. House adopts bill that could ban TikTok amid Trump resistance

In August 2020, following an attempt by the Trump administration to force the sale of TikTok, Beijing revised its export control rules to cover a variety of technologies it deemed sensitive, including technology that appears similar to TikTok’s personalized information recommendation services.

Years later, in March 2023, a Commerce Ministry spokeswoman said in the government’s first direct response to the matter that China would oppose any forced sale of TikTok, because a sale or divestiture of the app would involve exporting technology and had to be approved by the Chinese government. Beijing has not indicated any change to this position since then.

A man walks past the headquarters of ByteDance, the parent company of TikTok, in Beijing.

TikTok’s algorithms, which keep users glued to the app, are believed to be key to its success. The algorithms give recommendations based on users’ behavior, thus pushing videos they actually like and want to watch.

“TikTok’s crown jewel, its AI algorithms, will put the company into a legal tug of war,” said Winston Ma, adjunct professor at New York University School of Law, adding that ByteDance is subject to Chinese laws that require it to seek Beijing’s approval before selling advanced technologies.

Silvers said it was possible that TikTok could seek a “middle ground” to try to meet US requirements for ownership, but it’s unclear whether American concerns can be mollified by cosmetic change.

He said the episode is likely to worsen relations between Beijing and Washington, which are already mired in an escalating battle over access to advanced technology such as computer chips and AI.

“Markets should expect [China to have] retaliatory actions against US firms as tech and trade issues continue on a negative trajectory,” he said.

If TikTok is eventually banned, more Chinese-owned apps in the US may be next in line, according to Alex Capri, a research fellow at the Hinrich Foundation and a lecturer at the National University of Singapore Business School.

“This latest episode with TikTok underscores the need for a much more robust regulatory framework in the US to address existential issues wrought by big-tech, in general,” he said.

Applications from Chinese developers popular in the US App Store or Google Play include budget retailers Temu and Shein, as well as short-form video editing app Capcut, which is also owned by ByteDance.

“This legislation marks a pivotal moment in the ongoing battle for control over emerging public opinion spaces, deepening the geopolitical contest between China and the US,” said Craig Singleton, senior China fellow at the non-partisan Foundation for Defense of Democracies in Washington, DC.

On Chinese social media site Weibo, hashtags related to TikTok being potentially banned in the US were trending on Thursday, generating 78 million views and thousands of discussion posts.

“Why can’t we just talk about business instead of elevating everything to the national [security] level?” said Weibo user “Mastering technology” in a post that was ranked “hot” by the platform. “Direct interference in business operations is inconsistent with the values of free market economy that the US has always advocated.”

“This is the US version of nationalism,” another user wrote.

Some online commentators urged Beijing to retaliate by taking action against US companies operating in China. But that was questioned by other users.

“We’ve already been unable to use Google, Twitter, and Facebook for more than a decade,” said one user. “I think we are way ahead of the US in blocking foreign news media [services].”

Capri said the saga exposes the “ironies and inequalities” of US-China commercial exchange.

“While China has completely banned [these] American apps, TikTok enjoys all the benefits of America’s free and open legal and political systems,” he said.

Martha Zhou in Beijing and Sophie Jeong in Hong Kong contributed to this article.

Latest article