The Impact of TikTok Ban in the US on China's Tech Giants

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TikTok is currently in hot water as it faces a potential ban in the United States. This is a similar situation to what other American social media companies have experienced when trying to break into the Chinese market.

On Wednesday, the US House of Representatives approved a bill that could potentially lead to the banning of TikTok in the country. This would happen if the app's Chinese owner, ByteDance, does not sell it to a buyer approved by the US government.

Chinese Foreign Ministry spokesperson Wang Wenbin expressed his concerns about the bill during a briefing on Thursday. He stated that the decision made by the US House of Representatives goes against the principles of fair competition and international economic and trade rules.

American apps have been restricted in China for a while. Most US social media platforms like Google, YouTube, X, Instagram, and Meta are blocked because they do not comply with the Chinese government's regulations on data collection and content sharing.

In 2010, Google decided to leave mainland China after being there for four years. The company stated that it could no longer censor search results on Google.cn, mentioning cyberattacks from China on Google and other American firms as one of the reasons for its departure.

More than a decade after that well-known retreat, the situation has reversed, although the details are not identical.

According to Brock Silvers, managing director at Kaiyuan Capital, "The TikTok bill is expected to be passed into law, and China's disapproval seems somewhat ironic, if not hypocritical, considering its attitude towards American social media platforms."

China's stance on US apps is clearly stated by Wang, who emphasized the difference and denounced what he sees as bullying and gangster logic.

The attention has shifted to the US Senate, where lawmakers are currently assessing the legislation. President Joe Biden has confirmed that he will sign the bill once it is presented to him.

US officials and legislators have raised worries about TikTok's possible national security threats, such as sharing data with the Chinese government or controlling the content shown on the app. However, TikTok has denied these allegations.

In response to the House vote, the Chinese Commerce Ministry stated on Thursday that they would do whatever it takes to protect their interests when it comes to TikTok.

The Chinese government has made it clear that it is against the idea of TikTok being sold off forcefully. They believe that TikTok's technology is extremely valuable and have been working since 2020 to have the power to block any sale by ByteDance.

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Beijing’s next steps

In August 2020, the Trump administration tried to make TikTok sell its business. In response, Beijing updated its export control rules to include technologies like TikTok's personalized recommendation services.

In March 2023, a Commerce Ministry spokesperson stated that China would not agree to a forced sale of TikTok. This is because selling the app would involve exporting technology that needs approval from the Chinese government. Beijing has not changed this stance.

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

TikTok's success is often attributed to its algorithms, designed to keep users engaged with the app. These algorithms work by analyzing users' behavior and providing video recommendations tailored to their preferences. This personalized approach ensures that users are shown content that they are genuinely interested in.

"TikTok's AI algorithms, considered its most valuable asset, are at the center of a legal battle," explained Winston Ma, adjunct professor at New York University School of Law. He mentioned that ByteDance, TikTok's parent company, must abide by Chinese laws that mandate approval from Beijing before selling advanced technologies.

There is a possibility that TikTok may attempt to find a compromise to satisfy US ownership regulations, according to Silvers. However, it remains uncertain if superficial changes will be enough to address American concerns.

The episode is expected to further strain relations between Beijing and Washington, which are currently caught up in a growing conflict over access to advanced technology like computer chips and AI.

According to him, there could be retaliatory measures from China against American companies as the tech and trade disputes between the two countries continue to worsen.

If TikTok is banned, there is a possibility that other Chinese-owned apps in the US could also face the same fate. Alex Capri, a research fellow at the Hinrich Foundation and a lecturer at the National University of Singapore Business School, has expressed this concern.

He mentioned that the recent incident involving TikTok highlights the importance of a stronger regulatory system in the US to handle the significant challenges posed by large technology companies.

Popular applications from Chinese developers such as budget retailers Temu and Shein, along with the short-form video editing app Capcut owned by ByteDance, can be found in the US App Store or Google Play.

Craig Singleton, a senior China fellow at the non-partisan Foundation for Defense of Democracies in Washington, DC, stated that this legislation represents a crucial moment in the ongoing struggle for influence in new public opinion spaces, further intensifying the geopolitical rivalry between China and the US.

On Thursday, hashtags on Chinese social media platform Weibo regarding the possible ban of TikTok in the US were trending, attracting 78 million views and sparking numerous discussions.

"Weibo user "Mastering technology" questioned why discussions about business cannot remain at a business level instead of being escalated to national security concerns. The user emphasized that direct interference in business operations goes against the principles of the free market economy that the US promotes."

Another user on the platform described this approach as the US version of nationalism.

Some online commentators suggested that Beijing should respond by targeting US companies in China. However, this idea was questioned by other users.

One user pointed out, "We've been without access to Google, Twitter, and Facebook for over ten years now. I believe we are already ahead of the US in restricting foreign news media services."

Capri pointed out that the saga reveals the "ironies and inequalities" in the commercial exchange between the US and China.

He mentioned that China has banned American apps, yet TikTok is able to take advantage of the benefits provided by America's free and open legal and political systems.

Editor's P/S:

The article delves into the ongoing battle between the US and China over the popular social media app TikTok. The US House of Representatives has approved a bill that could potentially lead to the banning of TikTok in the country if its Chinese owner, ByteDance, does not sell it to a buyer approved by the US government. China has expressed