In forcing TikTok sale, the US is taking a page out of China’s playbook
- But as data becomes the new competitive domain, the TikTok case should be used instead to push for fair treatment of foreign firms in the tech industry, in both the US and China, as well as data protection standards
“It is time that other countries saw through the outrageous farce … and joined hands to oppose such blatant robberies and maintain a fair global business environment.”
“These forms of state-sponsored forced technology transfer are truly a devil’s bargain.”
06:02
Global expansion of TikTok and other Chinese tech companies is likely, only not in the West
Beijing sometimes cites security, but mostly references its desire to acquire knowledge as a developing economy, when insisting that American companies form joint ventures with local partners when they want to enter China’s health care, education and aviation sectors, among others. Mostly, Western companies have not been able to resist China’s huge market.
The concerns on both sides about such joint ventures is that intellectual property, trade secrets and proprietary technologies are transferred, willingly or otherwise. Since 2017, US Trade Representative Robert Lighthizer has prepared public reports expressing concerns about such issues. In TikTok’s case, Beijing worries about who controls the algorithm that suggests a never-ending feed of videos.
Intellectual property theft is wrong, but there is nothing bad in principle about joint ventures. Local partners can provide insights on domestic regulations; foreign investors can offer new technologies and products. The subsequent diffusion of knowledge has been recognised as an inevitable and generally mutually beneficial consequence of cooperation.
The World Trade Organisation’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) – signed by both the US and China – even encourages the growth-accelerating transfer of knowledge and technology from developed to developing economies.
But those arguments seem facile now because the TikTok case contains an important nuance: it is symbolic of a simmering great power rivalry. Control of how and where user data flows has become a new domain of competition.
02:06
Facebook, Amazon, Google and Apple respond to Congress about whether China steals US technology
After all, if Beijing and Washington can come to an agreement on how TikTok should be treated in the US, why should the same treatment not work for Facebook, Twitter or other American companies that want to enter China?
Fairness should headline any US trade policy, even if Trump’s capricious handling of TikTok is anything but. The management of citizens’ data will remain a hot topic, particularly as geopolitical tensions heat up. Meantime, however, rules and common standards can still be drawn up to the benefit of American and Chinese companies. That, rather than arbitrary barriers on both sides of the Pacific, would be fair.
Yukon Huang is a senior fellow at the Carnegie Endowment for International Peace. He is author of Cracking the China Conundrum: Why Conventional Economic Wisdom is Wrong. Joshua Levy is a James C. Gaither Junior Fellow with the Carnegie Endowment of International Peace’s Asia Programme.