It’s getting harder for tech companies to bridge the US-China divide

September 21, 2020 By [email protected]_84 Off

Corporations have never been able to cleanly separate their activities from geopolitics. Now, technology firms are finding it increasingly difficult to work across the US-China divide. Try as they might to cross-pollinate through research and investments, the climate between China and the United States continues to deteriorate into political one-upmanship, leaving users to pay the steepest costs.

The Trump administration’s recent order to remove TikTok and WeChat from American app stores, due to alleged cybersecurity concerns, was a direct challenge to China’s own efforts to build the next generation of global technology companies. At the heart of the conflict is deeply personal politics. Both apps survive in China only by the goodwill of President Xi Jinping, and both were at risk of being removed from the United States by order of President Donald Trump.  

WeChat and TikTok’s recent trials show how the chief executives in both China and the US have outsized influence over the way modern technologies evolve. In the end, their self-serving actions are less about cybersecurity than about preserving their respective administration’s political interests.

Before the US Commerce Department’s order to remove both apps took effect, Bytedance (which owns TikTok) announced a new agreement with Oracle and the Trump administration that will allow TikTok to continue operating in the US.

TikTok’s partial divestment to Oracle and Walmart plays to Trump’s personal politics. 

However, that agreement appears to only shift financial assets from Bytedance to Oracle and Walmart, and move its American hosting platform from Google Cloud to Oracle Cloud. No significant change in oversight of the app’s data practices was announced, and the largest ownership stake to change hands was 20 percent of TikTok (worth an estimated $50 billion), leaving majority control with Bytedance. 

Meanwhile, banning WeChat in the US would do little overall financial damage to its owner, Tencent because the ban wouldn’t impact the company’s highly profitable gaming and movie investments. Moreover, the vast majority of WeChat’s 1 billion worldwide users remain within mainland China, with app downloads within Google Play’s international store totaling just 100 million.

In fact, the most significant financial hit of the WeChat ban (which was temporarily blocked by a US judge) will be to limit spending by Chinese nationals in the United States, who rely on WeChat not just to chat but also to process peer-to-peer transactions and to serve as a cashless payment tool. And WeChat users in the US who resort to virus-ridden alternatives as a result of the ban could put themselves and their data at risk.

Political interests

In August 2018, Xi stated in a speech that “without cybersecurity, there is no national security.” Two years later, both he and his adversary Trump are exploring the meaning of that statement in their own way.

Xi has hardwired his personal “Xi Jinping Thought” ideology into his Constitution as well as the nation’s cybersecurity rules. Rumormongering is now a criminal action under China’s cyber bureau, and mentions of Xi are meticulously policed. Even amid the covid-19 crisis, keywords related to Xi’s handling of the pandemic were blocked, putting the leader’s protection before efforts to investigate the political dimensions of the pandemic.

Trump, for his part, has reportedly asked for $5 billion dollars from the TikTok-Oracle-Walmart deal to support his newly created “patriotic education” commission, and secured a 20 percent American-owned stake in TikTok Global. Such moves benefit neither cybersecurity infrastructures nor the privacy of American users, but do reinforce Trump’s political ideology in the run-up to the US election.

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