Beijing Uses TikTok as Leverage to Extract Concessions from US

Strategic Insights -

Beijing's apparent willingness to allow US-based TikTok's operations has been met with skepticism from analysts, who believe the Chinese government is using the app as leverage to extract concessions from the US, including easing semiconductor export controls, investment restrictions, and tariffs. The deal, which was initially expected to finalize the sale of TikTok's US operations, now seems to be a work in progress, with Chinese leaders pushing for a framework that aligns with Beijing's interests.

Key Takeaways:

  • Beijing is using TikTok as a bargaining chip to secure concessions from the US, including easing semiconductor export controls, investment restrictions, and tariffs.
  • The Chinese government is pushing for a framework that aligns with Beijing's interests, which includes retaining ownership of TikTok's algorithm and intellectual property rights.
  • Analysts believe that the Chinese state has appropriated the TikTok issue to secure more advantageous concessions in other policy domains.
  • Beijing's willingness to cooperate on TikTok is seen as a reversal of its earlier stance, which denounced Trump's attempt to force a TikTok sale as "daylight robbery."
  • The Chinese government will review the export of TikTok's tech and intellectual property licensing needed to complete the deal.
  • The algorithm and intellectual property rights of TikTok are a key sticking point in the deal, with China refusing to sell the technology to the US.

Statistics:

  • 170 million Americans and over 1.5 billion users worldwide use TikTok.
  • The US law on TikTok explicitly precludes any cooperation concerning "the operation of a content recommendation algorithm."
  • The Chinese government has placed a raft of technologies under export controls, including those that enable personalized content recommendations based on data analysis.
  • The US and China have agreed to extend the deadline to ban TikTok to November.
  • Donald Trump has claimed that he and Xi Jinping had "approved the TikTok deal" following a nearly two-hour call, but Beijing has made no such commitment.

Sources:

  • CNN, "Beijing says it's open to US-China trade deal, but with conditions," November 2020.
  • China's Foreign Ministry, "China, US reach 'basic framework consensus' on TikTok," November 2020.
  • The People's Daily, "China, US reach consensus on TikTok," November 2020.
  • Brian Wong, an assistant professor at the University of Hong Kong, "China's Co-option of TikTok," November 2020.
  • Yun Sun, director of the China Program at the Stimson Center, "China's TikTok policy," November 2020.
  • Trey McArver, co-founder of research firm Trivium China, "TikTok and China's tech policy," November 2020.