Chinese Firms Grapple With Foreign Hostility and Govt. Rules

The creator of the Beijing-based internet media business ByteDance, Zhang Yiming, was sent a warning by Chinese authorities in 2018 to remove a joke and comedy video-sharing app. He promised nine corrective actions and expressed regret for failing to adhere to the instructions and expectations of supervisory authorities. Now, the U.S. government has issued a similar request to ByteDance, the owner of TikTok: sell the short video app or risk banning.

Distrust between China and the United States is growing, which is causing Chinese enterprises like ByteDance to experience unstable footing. The companies find themselves torn between their authoritarian government and the United States government, which is becoming more distrustful and even hostile.

There are a number of Chinese-owned multinationals, like TikTok, that are doing well in the US. For Chinese businesspeople looking to expand their horizons outside of their country’s weak economy, the burden of the Chinese-owned label has become too much to bear. The outside world has a hard time distinguishing Chinese businesses from the Chinese government due to the opaque nature of conducting business in China. Through censorship and propaganda, certain companies—particularly internet platforms like ByteDance—assist in consolidating the Communist Party’s control. As one would expect in a nation where the state controls a significant portion of the population’s possessions, businesses have profited from their tight relationships with the government.

The concern with ByteDance is its dualistic nature, serving as a tool of Beijing’s propaganda machine while also reaping the benefits of a free and democratic society. This duality is not confined to China’s borders. Globally, over a billion people use TikTok, with 170 million of them residing in the US alone. The United States government is apprehensive that China’s government could exploit ByteDance to disseminate propaganda or gain access to user’s private information, a concern that resonates with the global audience.

Just as their American counterparts seek a level playing field, most private-sector Chinese enterprises are driven by the pursuit of economic opportunities. However, this objective is now under scrutiny. The world is witnessing a shift away from globalization, and the Communist Party has prioritized national security. In light of these developments, democracies must urgently reassess their policies and practices to adapt to the changing global landscape.