Sep 29, 2020

How did a short-form video platform - regarded by some as superficial, and best known for dance routines and internet-age jokes - become a symbol of the growing tensions between the US and China over technology?

TikTok is a global phenomenon with 700 million monthly active users. In July, US President Donald Trump threatened to ban it, but gave its Chinese parent company ByteDance a chance to divest itself of the app.

Mr Trump issued an executive order banning TikTok from Apple and Google's app stores, claiming it was a security threat. Just hours before the ban was to take effect, TikTok was given a reprieve, with a US court granting it an injunction against the order. But the case will be before court again in November, when TikTok will have to argue against another set of restrictions.

TikTok is the latest Chinese tech company to be caught awkwardly in a growing rift between the world's two largest economies. It's an indicator of growing tensions between the two countries, but also of rising nationalism when it comes to tech companies.

What is TikTok and why is it important?

TikTok is a short-form video platform which allows users to make 15 second videos, with features that allow users to add music and effects. It's the creation of Chinese tech company ByteDance, which released its first short-form video app Douyin to Chinese audiences in 2016, and followed up with TikTok the following year for a global audience.

And it's massively popular. Douyin and TikTok together have been downloaded more than two billion times. Investors clearly see the value, too. After the ban was announced, TikTok had a number of potential investors, including Microsoft and Twitter.

Ultimately, ByteDance made a preliminary deal with Walmart and Oracle, who would both take stakes in the app. The exact terms of the agreement remain unclear, but it's understood that ByteDance wouldn't sell off TikTok's prized algorithm.

After initially saying he'd give the deal his backing, Mr Trump later suggested he wouldn't agree to it unless US interests had a controlling stake in the company. The deal has been further complicated by the Chinese government, which suggested it might step in and require a license for ByteDance to sell TikTok.

Why does the US object to TikTok?

In his executive order, Mr Trump said that security was the main concern. He said TikTok's data collection could potentially allow China "to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage."

"I think the case against it is more theoretical than actual," said Associate Professor in Practice James Crabtree from the Lee Kuan Yew School of Public Policy. There's little evidence, he added, that ByteDance has handed over data to the Chinese government, but the mere potential is enough to scare many regulators and politicians in Washington.

"TikTok is clearly not as big a security threat as a company like Huawei which is integrated into core technological networks, and looking to the future, if TikTok is a security threat, then so is everything else," he said on an episode of The Coconuts Podcast.

Another concern, he said, is its potential for intervention into US politics. Although there's no evidence of a Russian-style cyber campaign, TikTok users and K-Pop fans claimed to have registered potentially hundreds of thousands of bogus tickets for one of Mr. Trump's campaign rallies, which was ultimately poorly attended.

What's the broader context?

This latest fight over a Chinese tech company follows a number of others. The US has banned Chinese telco Huawei from its networks. It is attempting to ban the messaging app WeChat, and it has made it increasingly difficult for US microchip makers to sell to Chinese tech companies.

In some cases, the US has also pressured its allies to follow suit. However, in the case of TikTok, President Trump moved after India - another of TikTok’s large overseas markets - implemented its own ban on TikTok and dozens of other Chinese apps.

China, of course, has also stoked the fires. The Chinese government has banned social networking platforms like Facebook and Twitter for years as part of its "Great Firewall", and recently created a "unreliable entities" list, suggesting it might act against more companies (although the government insists it will adhere to a strict legal process).

Ultimately, though, the hardening US attitudes might just be an extension of the tit-for-tat trade war between the two countries.

"There's a much broader feeling in the US about reciprocity," said Mr Crabtree.

Splinternet?

But there are implications beyond the US and China. Mr Crabtree thinks the TikTok squabble is an example of the borders that are emerging to divide up what was once a far more globally focused internet.

In the US, the bar for "national security" has been lowered, while in China, the government "wants to have these great global companies that are icons of Chinese modernity, but on the other hand, its foreign policy is undermining them," he said.

The effects will be felt elsewhere too. Southeast Asia could become something of a battleground for Chinese and US tech companies seeking out new territory. Large Chinese technology companies have invested heavily in Singapore, but the tensions might dent the city state's aspirations to become a sort of "digital Switzerland" for cloud computing services.

Ultimately, Mr Crabtree thinks the tensions are bad news for entrepreneurs.

"The big casualty in all of this is anyone to have the dream in the future of building a global technology giant," he said.

(photo: Solen Feyissa)

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