Dan Wang has been a number one observer of latest China for years. As a technical analyst at Gavekal Dragonomics, a research company, he is very read bulletinWang outlined the country’s development as a fast-growing, high-tech economy and, more recently, its slowdown and growing tensions with the United States.
Wang is currently a guest research fellow at the Paul Tsai China Center at Yale Law School and is writing a book on U.S.-China relations. He spoke to DealBook about how China views the latest US attacks on TikTok. The interview has been edited and condensed.
How does China view the latest TikTok battle?
Chinese state media and government spokespeople have made it clear that this is very undesirable. China believes that ByteDance is a successful company that’s being persecuted in America since it is Chinese. The Chinese are offended when the US government declares it a national security threat. Beijing has passed regulations that make suggestion algorithms subject to Chinese export controls, so the sense is that the government won’t allow sales.
Is the Chinese government using this case as a propaganda tool?
State media are keeping a low profile as there are still just a few steps left before ByteDance could have to sell TikTok in the US. These include the Senate resolution, the White House’s signature, in addition to the legal challenges that ByteDance will definitely bring. Until it becomes truly inevitable, state media doesn’t encourage residents to dissent an excessive amount of.
What does it appear to be when state media mobilizes society?
In 2022, Congress passed the Uyghur Forced Labor Prevention Act, and plenty of Western corporations have issued clear statements. Chinese state media focused on one company, H&M, which made a reasonably typical statement that it doesn’t source from Xinjiang and doesn’t tolerate forced labor in its supply chains. The account of the Chinese Communist Youth League, one among the instruments of the Communist Party, posted a press release on social media saying that you just cannot make cash in China and criticize China at the same time. This sparked an enormous consumer boycott. H&M products have disappeared from just about all e-commerce sites, and H&M stores have disappeared from online maps. The company was principally faraway from the Chinese Internet and it was really difficult to purchase its products or find its physical stores.
How could China take revenge on American corporations?
The more vital query is: Will Beijing imagine this act deserves retaliation? I spent all 4 years of President Trump’s trade war in China, and Beijing was very lenient towards American corporations for 2 foremost reasons.
First, Beijing realizes that the foremost employers in China are large American corporations similar to Apple, through Foxconn, in addition to Tesla.
Second, Beijing realizes that American corporations are its last best friends in Washington, and it would favor that American corporations proceed to lobby Congress to keep up ties. I’d also relatively Elon Musk not spend all day tweeting about how terrible China is.
Is China playing the long game and maybe not reacting if the bill is passed?
Beijing doesn’t care much about whether ByteDance loses some money and, by extension, whether its shareholders lose money.
Beijing could see this as a reasonably significant propaganda victory if the U.S. government forces a sale or actually bans TikTok. It would not sit well with Beijing to say that the United States has been talking about freedom of speech for a very long time and using it as a persist with beat China over its human rights record, but this shows that the United States is a hypocrite. Beijing can be quite blissful to say that the US government does the whole lot we do, which makes our actions more justified.
What does this episode tell us about how Beijing views Western investors, a few of whom, like Coatue and Susquehanna International Group, have stakes in ByteDance?
The Communist Party discusses the vital game of welcoming American investors. The China Development Forum will happen next week and will probably be a gathering between corporations similar to Apple and Qualcomm with high-level officials. Whether Beijing actually implements policies to encourage Western investment is one other query.
Beijing would say that if the U.S. government expropriates Western investors like Coatue and Susquehanna, that’s the U.S. government’s problem. This is an American law that will harm American investors. If anything happened, Beijing would say: let’s speak about it with our congressmen.
How is the proven fact that Steve Mnuchin, former Treasury Secretary, is working on a suggestion to purchase TikTok perceived?
If successful, it will be seen as in poor taste – not only in China but almost in all places – that an official who ordered the sale then he becomes its actual owner. For Beijing, the icing on the propaganda cake will probably be the proven fact that it is going to find yourself in the hands of a member of President Trump’s cabinet.
What should ByteDance or TikTok do to fight back?
Hire great lawyers and higher lobbyists.
