The House-passed bill aimed at forcing China's ByteDance to sell TikTok is just one part of a growing effort to curtail China's technology ties with the United States.
When lawmakers were voting on the TikTok bill on March 13, members of the House Energy and Commerce subcommittee were considering three similar bills. We require authorities to identify routers, modems and other telecommunications equipment that may contain technical content from China, to identify telecommunications carriers with Chinese ownership, and to limit the use of drones made by Chinese companies. Mandating the prohibition of
Rep. Bob Latta (R-Ohio), chairman of the House Energy, Commerce, Communications and Technology Subcommittee, said before the price increase that the Chinese Communist Party posed a “grave threat to the national security and economic leadership of the United States.” Stated. “China is actively seeking to overtake the United States as the world leader in communications and technology.”
The bill, which also targets companies and technologies from Russia, Iran and North Korea, which are considered foreign adversaries, was unanimously reported favorably to the full committee.
President Joe Biden has also moved to block exports of advanced semiconductor chips to China in a bid to thwart the Chinese government's advances in artificial intelligence systems. And the administration is considering ways to stem the flow of U.S.-backed venture capital into China's high-tech sector.
James Lewis, director of the Technology and Public Policy Program at the Strategic International Center, said targeting Chinese technology is a flagship move in an election year when both parties are keen to take a tough stance on China. He said there is. the study.
“There's quite a bit of hysteria about all of this, but the idea is that we're doing to China what China has done to us,” Lewis said in an interview. '', referring to the US ban on social media apps that began in 2016. 2010. Facebook, Google, YouTube, Instagram, and WhatsApp have been blocked in China for not following Chinese government rules on data collection and sharing.
The Chinese are “keen on controlling the so-called information space, so it's hard for them to object when the U.S. tries to do the same thing with TikTok,” Lewis said.
That did not stop Chinese Foreign Ministry spokesperson Wang Wenbin from opposing the House bill. At a press conference in Beijing last week, he said the bill would put the United States “on the other side of the principles of fair competition and international economic and trade rules.”
The measure would require ByteDance, TikTok's Chinese owner, to sell its U.S. subsidiary within six months of the law taking effect, or the U.S. government would force app stores and websites to stop hosting the app. It may be forced. The bill would also give the president the power to deny access to U.S. users to other social media apps owned and operated by foreign adversaries unless they sever ties with the foreign owners. Become.
There's no need to rush in the Senate.
It's unclear how quickly the Senate will take up the bill, with Majority Leader Charles E. Schumer (D.N.Y.) and other lawmakers suggesting there's no need to rush.
Schumer has supported the idea of a U.S. company acquiring TikTok in the past. “A US company should buy TikTok so everyone can keep using it and our data is safe,” Schumer said in a Twitter post at the time in August 2020.
“TikTok in China is subject to Chinese Communist Party laws that could require it to hand over data to the government,” Schumer continued. “TikTok must find a safe way to continue.”
Although there are questions about whether the Senate will act, potential buyers are already lining up.
Former U.S. Treasury Secretary Steven Mnuchin, who heads Liberty Strategic Capital, told CNBC last week that he was forming an investor group.
But Lewis noted that the price could be steep, perhaps reaching $400 billion, given China's insistence that the sale of TikTok's recommendation algorithm would amount to a technology transfer. He said China controls the decision whether to export the algorithm, so there will be a “vote” on the price.
The TikTok app is based in the United States, but ByteDance could avoid the U.S. ban while remaining available to U.S. users if it moved its operations overseas, such as to Ireland or Abu Dhabi. Yes, Lewis said.
The European Union's recently passed Digital Markets Act aims to reduce the power of app stores run by Apple Inc. and Google LLC by allowing users to download apps that are not available in their device's app store. There is. Apple said this month that it would follow this change. This could mean users can access TikTok even if they are in the United States, Lewis said.
The Chinese government could also put pressure on American tech companies with deep ties to China.
A report released in February by Georgetown University's Center for Security and Emerging Technologies said Apple, Tesla and Amazon.com could come under pressure if China decides to retaliate in the wake of the Taiwan conflict. It is said that there is.
“Analysis of revenues, investments in manufacturing facilities, and supplier networks suggests that Apple and Tesla, and to a lesser extent Amazon, may be particularly vulnerable to Chinese economic pressure and coercion amid a potential Taiwan crisis.” “This suggests that there is,” the report said. Will the bond be sealed?: Big Tech, lessons from Ukraine, and implications for Taiwan. ”
There may be similar pressure in the TikTok battle.
“Suppose the Chinese say to companies like Apple and Microsoft, 'Okay, TikTok has been sold, now it's your turn,'” Lewis said. This would create a “major rift in the tangled economic relationship” between the two countries.
