A US ban on TikTok and WeChat will deal businesses a blow. But they will find a way around it
A litter of adorable brown puppies appear on the screen of my mobile phone. I swipe up. Another video comes up, featuring a man who is making a ping pong ball levitate. His magic trick is quickly exposed by a friend, who has clearly had enough. I chuckle, and swipe up again. This time, a different man holds up two halves of a beautifully ripe, golden mango that was freshly harvested from his farm.
This is the world of Douyin (抖音), known as TikTok outside of China, where users can create, post, and swipe through one-minute videos into an infinite abyss of entertainment and social marketing.
The app has 400 million daily active users in China alone, and an equally phenomenal presence elsewhere, having surpassed 2 billion downloads globally. But it has been caught in a bit of a tight spot in the United States recently.
Citing national security concerns, US President Donald Trump wants TikTok’s Beijing-based owner ByteDance to sell its US operations to an American company, or face a ban in the country. A deal that was supposed to happen in time for the September 20 deadline is still being worked out. What happens next is anybody’s guess.
This is a political move that Trump is using for a win in the disastrous trade war he has waged against China, and it has already led to big implications for companies in China and US. Such battles are unnecessary during a global recession and pandemic, adding unhelpful oil to a worrying downward spiral.
But amid this depressing scene, businesses are not staying passive and waiting to be slayed by the capricious calls of their governments. On both sides of the Pacific, enterprises are living up to their name to find a solution.
Battle of the Pacific
First, the bad news. The US Commerce Department is targeting not just TikTok but also popular messaging app WeChat, extending the economic conflict beyond the realm of physical goods into Internet property. This is a list that could go on forever.
To be clear, their current predicament is something American Internet companies have long experienced in China. The country has been using its online censorship system – the Great Firewall of China (防火长城) – to regulate the Internet since 2000, keeping out websites and apps like Google and Facebook.
Should a total ban on TikTok and WeChat kick in, both American and Chinese businesses with operations in each other’s countries have much to lose. WeChat, after all, is the main channel of communication, payments and even earnings for people between the two countries.
I know of a Chinese technology company that has stopped short of going public in the US in light of the rising uncertainty, as investors revalue China’s tech sector.
And you can be sure the other countries are watching to see what will happen. This battle has all the ingredients to morph into a global war. The United Kingdom has already banned Huawei from participating in its 5G rollout, while deteriorating relations between India and China has led India to ban dozens of Chinese apps, including TikTok.
If more countries take their cues from the US’ insular stance, we could be looking at a world that is ironically more divided than connected in an age of technology.
Another door opens
Now, the good news. The impressive thing is this: as the Pacific trade war spirals on, we again see Chinese ingenuity at work.
Tencent Holdings, the parent company of WeChat, has changed the name of its WeChat Work office collaboration app to WeCom, setting it up as a potential alternative to WeChat. It could end up being able to work around the ban.
At the same time, Bytedance is priming Singapore as its regional headquarters for Southeast Asia. It has also stepped up the purchase of servers in the Lion City to back up US data as a contingency, according to unnamed sources in a Reuters report.
Elsewhere, Chinese surveillance company Hikvision Digital Technology said it had replaced US-sourced components in its products months before a set of US sanctions kicked in in October, minimising the disruption to its supply chain.
The same could be said about the Americans. Despite the Great Firewall, US tech giants have still found ways to operate and offer their services to Chinese businesses.
For example, while Google’s search service cannot be accessed by most users in the country, the company has been operating there for years, selling its advertising and cloud computing services to firms with a presence in other parts of the world. It even has an Artificial Intelligence centre in Shanghai.
These examples illustrate the ingenuity of businesses, both Chinese and American. And such creativity to survive even in the harshest of environments provide the oxygen of optimism we badly need today. Even when one door closes, the world of business will do its darnedest to find another to open.