In the past In the last decade, the dynamic between Chinese and US tech companies has changed dramatically. Once seen as a promising market for American businesses, that narrative turned as China's technological innovation and investment power became more apparent, and the growing reach of the Chinese Communist Party's cybersecurity regulations fueled privacy concerns. For years, however, there seemed to be room for a flow of ideas between the two countries. However, this promise has waned against the backdrop of the tariff wars and, most recently, the executive orders of the Trump administration against TikTok and WeChat.
The US Department of Commerce was supposed to enforce the shutdown of TikTok and WeChat in the US last weekend, but both apps received redress. In WeChats In this case, a US District Court judge has issued a temporary stay on the ban while TikTok owner ByteDance is finalizing a complicated deal with Oracle.
The TikTok and WeChat-Imbroglios underline how much the perception of Chinese technology has developed in America. Not only is TikTok the first consumer app from a Chinese company to gain a foothold in the United States, it has also had a significant impact on popular culture there. Ten or even five years ago this would have been almost inconceivable.
China as an expansion target
China, with a population of 1.4 billion, has long been viewed as a lucrative market by many foreign tech companies, even as state censorship began to expand. In 2003, the Chinese Ministry of Public Security launched the Golden Shield project, commonly known as the Great Firewall of China. This device controls which websites and apps Chinese internet users overseas can access. Initially, the Great Firewall was mainly aimed at accessing Chinese-language websites with Chinese Communist Party content. Then it started blocking more services.
Even as the Communist Party's online censorship tightened, many American internet companies were still keen to expand into China. Perhaps the most prominent example from this period is Google, which added Chinese support to Google.com in 2000.
Although access to the search engine was sporadic (according to a schedule from the Financial Times in 2010, this may have been due to "extensive filtering" by China's licensed Internet service providers) and was temporarily blocked in 2002, Google continued to target new services for Users in China, including a simplified Chinese language version of Google News.
In 2005, the company announced plans to set up a research and development center in China. The next year, Google.cn was officially launched. To that end, Google agreed to exclude search results on sensitive political issues, which sparked controversy.
Despite its concessions to the Chinese government, Google's relationship with China began to deteriorate, suggesting what other foreign tech companies, especially those offering online services, would do if they tried to enter China. After turning it on and off, access to YouTube was completely blocked in 2009 after footage was uploaded that appeared to show the brutal beatings of Tibetan protesters in Lhasa. That year, China also blocked access to Facebook and Twitter.
In January 2010, Google announced that it was no longer willing to censor searches in China and to withdraw from the country if necessary. In addition, all searches on Google.cn have been redirected to Google.com.hk.
However, the company continued its research and development activities there and maintained a sales team. (In 2018, an investigation by The Intercept found that Google had resumed work on a censored search engine for China, code-named Project Dragonfly.) Other major US tech companies continued to advertise China despite their services there were blocked.
For example, Facebook boss Mark Zuckerberg made several trips to China in the mid-2010s, including a visit to Tsinghua University, a leading research university, in 2015. Zuckerberg had joined the university's board of directors last year and had given several public lectures in Mandarin. Speculation has mainly centered on Facebook's efforts to bring a version of its service to China. However, companies based in China have been and are one of Facebook's primary sources of income.
The Chinese government's policies to help domestic businesses become more competitive also began to have an impact. By 2015, many American technology companies had to find a local partner to enter China. The narrative that China needed American technical innovations began to turn on its head.
A changing dynamic
With Google Play being blocked in China as well, it paved the way for the rise of third-party Android app stores, including My App from Chinese internet giant Tencent.
However, Tencent's most influential product is WeChat, the messenger launched in 2011. Two years later, Tencent added mobile payments by integrating it with TenPay. In less than five years, WeChat became an integral part of everyday life for hundreds of millions of users in China. WeChat Pay and Alibaba's Alipay, its main competitor, have revolutionized payments in China, where around a third of consumer payments are currently cashless, according to research by think tank CGAP.
In 2017, Wechat launched “mini programs” that allow developers to create “apps in one app” that run on WeChat. The program got off to a quick start, and in less than two years Tencent said it had reached one million mini programs and 200 million users per day. Even Google quietly launched its own mini-program in 2018.
Despite its ubiquity in China, WeChat's international presence is relatively low, especially when compared to other messengers like WhatsApp. WeChat claims a total of more than a billion monthly active users, but only an estimated 100 to 200 million are international users. Many are members of the Chinese diaspora who use it to keep in touch with family members and co-workers in mainland China as many other popular messengers, including WhatsApp, Facebook Messenger, and Line, are blocked there.
Meanwhile, another company was gaining traction, and would eventually succeed where Tencent hadn't.
ByteDance was founded in 2012 by Microsoft veteran Zhang Yiming had its own early run-ins with the Chinese government. The first app, a social media platform called Neihan Duanzi, which reached 200 million users by 2017, was shut down the next year after the National Radio and TV Administration accused it of hosting inappropriate content. Despite this early setback, ByteDance continued to grow, releasing apps like Toutiao, one of China's leading news aggregators.
The product it is best known for was launched in 2016. ByteDance, known as Douyin in China, always planned to expand the short video sharing app overseas. In an interview with Chinese tech news site 36Kr, Zhang said, “China is only home to one fifth of the world's internet users. If we don't expand globally, we'll have to lose to our colleagues who keep an eye on the rest of the world. “This is in line with and contradicting the point of view of US Internet companies who viewed China as a critical market.
TikTok, the international version of Douyin, was launched in 2017. That year, ByteDance also bought Musical.ly, a lip-syncing app popular with teenagers, valued at $ 800-1 billion. ByteDance merged Musical.ly with TikTok and consolidated the audience.
By early 2019, TikTok had become popular with teenagers and people in their early 20s, although many older people still struggled to understand its appeal. But when TikTok became a mainstay of Gen Z culture, it was also scrutinized by the U.S. government. In February 2019, the Federal Trade Commission fined TikTok $ 5.7 million for violating children's privacy laws.
A few months later, the US government reportedly began a national security clearance of TikTok. This was the first in a series of events that led to Trump's order against the company in August and ByteDance's new but confusing agreement with "trusted technology partner" Oracle.
The Impact of China's Cybersecurity Law of 2017
The United States isn't the only country where TikTok has been classified as a national security threat. In June, it was among the 59 apps developed by Chinese companies banned in India to threaten the country's "national security and defense". The French data protection officer CNIL is currently investigating how it handles user data.
While some cybersecurity experts believe that TikTok's data collection practices are similar to those of other social media apps whose revenue depends on targeted ads, at the heart of the problem is a Chinese law that was implemented in June 2017 that requires companies to do so comply with government requirements for data stored in China. ByteDance has repeatedly insisted that it would resist attempts by the Chinese government to access US users' data, which it claims is stored in the US and Singapore.
"Our data centers are located entirely outside of China and none of our data is subject to Chinese law," TikTok wrote in an October 2019 statement. "We also have a dedicated technical team that is dedicated to adhering to solid cybersecurity policies, privacy and security practices concentrated."
In the same post, TikTok also addressed concerns about content being censored, including videos about the protests in Hong Kong and China's treatment of Uyghurs and other Muslim groups. “We have never been asked by the Chinese government to remove any content, and we would not do so if asked to. Period, ”said the company.
The uncertain future of WeChat and TikTok in the US
But as a Chinese company, ByteDance is ultimately still bound by Chinese laws. Earlier this week, ByteDance announced that it will retain an 80% stake in TikTok after selling a total of 20% to Oracle and Walmart. Then Ken Glueck, executive vice president of Oracle said that Oracle and Walmart would make their investment in creating a new entity called TikTok Global. He added that ByteDance will not own TikTok Global.
This raises more questions, but doesn't answer the most urgent one: How close will the US version of TikTok stay to ByteDance and will it still be subject to Chinese cybersecurity regulations that are of so much concern?
Around the same time that ByteDance's proposed deal with Oracle and Walmart was announced, a U.S. district judge temporarily upheld the statewide ban on WeChat as part of a lawsuit against the U.S. WeChat Users Alliance, a nonprofit organization US government attorneys who want to gain access to WeChat for users in America. In her statement, Judge Laurel Beeler wrote: "While the government has determined that China's activities raise significant national security concerns, it has provided little evidence that the effective ban on WeChat for all US users addresses these concerns."
On its website, the US WeChat Users Alliance announced that Trump's August 6th order against WeChat "violates many provisions of the US Constitution and the Administrative Procedure Act." In addition, the group argued that a WeChat ban would "seriously affect the lives and jobs of millions of people in the United States." use WeChat to speak to family, friends and business associates in China.
While WeChat is heavily censored, users have often found ingenious ways to bypass bans on topics that are considered sensitive by the Chinese government. For example, people used emojis, PDFs, and fictional languages like Klingon to share an interview with Ai Fen, director of the emergency department at Wuhan Central Hospital and one of the first whistleblowers, who raised the alarm about COVID-19 even when the government tried to suppress this information about the disease.
The growing gap
The US government's actions against TikTok and WeChat are taking place in an increasingly tense political landscape. Huawei and ZTE were first identified as a potential threat to US national security in a 2012 report by the bipartisan House Committee. However, legal action against Huawei, one of the world's largest telecommunications equipment providers, escalated under the Trump administration. These include criminal charges filed by the Justice Department against Huawei and the arrest and indictment of Chief Financial Officer Meng Wanzhou.
The US government's actions in the name of national security don't just affect the Chinese government or China's largest corporations. This also affects individuals, as in the case of increasingly strict visa restrictions for Chinese students.
At the same time, under President Xi Jinping's regime, the Great Firewall has become more restrictive and China's cybersecurity laws are becoming increasingly invasive, giving the government even more access to citizen data. Increasingly sophisticated surveillance technology has been used to monitor Uyghurs and other ethnic minorities, and crackdowns on VPN services that began to escalate in 2017 are making it difficult for people in China to bypass the Great Firewall.
Compared to these social issues, the future of a video sharing app seems relatively slim. However, this underscores one of the most worrying developments in US-China relations over the past decade.
In a 2016 Washington Post predictive article titled "America Wants to Believe China Cannot Innovate. Tech Tells a Different Story," wrote Emily Rauhala. "China's tech scene thrives in a parallel universe." The deep cultural impact of TikTok gave an insight into what is possible when two parallel universes are connected. Besides geopolitical tensions, the excitement surrounding TikTok and WeChat shows something else: the exchange of ideas and information between people in two of the most powerful countries the world is increasingly constrained by circumstances beyond their control.