‘Cherry on the Cake’: How China Views the U.S. Crackdown on TikTok

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Dan Wang has been a leading observer of contemporary China for years. As a tech analyst at Gavekal Dragonomics, a research firm, and through his well-read newsletter, Wang has charted the country’s rise as a fast-growing high-tech economy and, more recently, its slowdown and rising tensions with the United States.

Wang is now a visiting scholar at Yale Law School’s Paul Tsai China Center and writing a book about relations between the United States and China. He spoke with DealBook about how China views the latest U.S. crackdown on TikTok. The interview has been edited and condensed.

How does China see the latest TikTok fight?

Chinese state media and government spokespeople have made it clear that this is very unwelcome. China feels that ByteDance is a very successful company that is being bullied in America because it is Chinese. The Chinese people are affronted by the U.S. government declaring it a national security threat. And Beijing has passed laws that recommendation algorithms are subject to Chinese export controls, so the sense is that the government will not allow a sale to go through.

Is the Chinese government using the case as a propaganda tool?

State media is keeping its powder dry because there are still several steps before ByteDance might have to sell TikTok in the U.S. These include Senate passage, the White House’s signature, as well as the legal challenges that ByteDance is sure to bring. Before this looks really imminent, state media is not rallying citizens to object too much.

What does it look like when state media mobilizes the public?

In 2022, Congress passed the Uyghur Forced Labor Prevention Act, and a lot of Western companies made anodyne statements. Chinese state media seized on one company, H&M, which made a fairly typical statement that it did not source from Xinjiang or tolerate forced labor in its supply chains. China’s Communist Youth League account, which is one of the instruments of the Communist Party, reposted a statement on social media saying that you cannot both make money in China as well as criticize China. That incited a vast consumer boycott. H&M products disappeared from pretty much all e-commerce sites, and H&M stores disappeared from online maps. The company was essentially erased from the Chinese internet, and it was really difficult to buy its products or find its physical stores.

How could China retaliate against U.S. companies?

The more important question is: Does Beijing decide that this act is worthy of retaliation? I spent all four years of President Trump’s trade war living in China, and Beijing was highly forbearing toward U.S. companies for two broad reasons.

First, Beijing realizes that big U.S. companies are major employers in China, like Apple, through Foxconn, as well as Tesla.

Second, Beijing realizes that American businesses are its last best friends left in Washington, and it would prefer that American companies continue to lobby Congress to maintain ties. It would also prefer that Elon Musk doesn’t spend all day tweeting about how terrible China is.

Is China playing a long game and perhaps not going to react if this bill passes?

Beijing doesn’t care too much whether ByteDance loses some money and, as an extension, if its shareholders are losing money.

Beijing might well treat this as a pretty substantial propaganda victory if the U.S. government forces a sale or actually bans TikTok. It would play into Beijing’s hands to say that the U.S. has been talking about free speech for a long time — and using that as a stick to beat China over its human rights record — but this illustrates that the U.S. is a hypocrite. Beijing would be quite happy to say that the U.S. government is doing everything that we are doing, and that makes our actions more legitimate.

What does this episode tell us about how Beijing views Western investors, some of which, like Coatue and Susquehanna International Group, have stakes in ByteDance?

The Communist Party talks up a big game of welcoming American investors. The Chinese Development Forum will take place next week, which is a gathering for companies like Apple and Qualcomm to see high-ranking officials. Whether Beijing actually implements policies to try to encourage Western investment is a different question.

Beijing would say that if the U.S. government expropriates Western investors, like Coatue and Susquehanna, that is the U.S. government’s problem. This is a U.S. law that might be harming U.S. investors. If anything, Beijing would say go take it up with your congressmen.

How is the fact that Steve Mnuchin, the former Treasury secretary, is working on a bid to buy TikTok perceived?

If it is successful, it would be viewed as in bad taste — not just in China but pretty much everywhere — that an official who ordered a sale then ends up actually owning it. For Beijing, it would be the cherry on the cake in terms of its propaganda that this is going to a member of President Trump’s cabinet.

What should ByteDance or TikTok do to fight back?

Hire great lawyers and better lobbyists.



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