Do Chinese IT companies really come to an end? The wave from white house…
Today, the mother company of Tiktok, Bytedance made an announcement to defend themselves from illegally using clients’ data. They claimed that Bytedance has started the negotiation with US goverment for more than one year, there was absolutely no inappropriate meaning of data collection. Furthermore, Bytedance established its Transparency Center to open the source code of Tiktok and audit criteria. All are aimed to avoid the worst situation.
Apparently, things won’t change much after this announcement, Bytedance will eventually have to hand over its Tiktok business in US without doubt. Give up an social app with more than 20 million MAU(Monthly Active User) in US? You can imagine how heartbroken Bytedance is.
Bytedance is not the first one who received unfair judgement from US government, and of course it won’t be the last one. White house just announced that Wechat service will be banned in US starting from September. What worse is all business collaboration related with Wechat will be banned as well.
Beginning with Huawei, and then Bytedance, Tencent, chinese companies are now facing the biggest problem in US market. Some are focusing on how to decrease the damage, and others are praying for not being the next. But, is it true that chinese companies need to say “byebye” to US market? I don’t think so, at least for now…
Along with the development of globalization, people are close to each other more than ever. You can travel easily, translate words with one click, know things around the world from one app, everything is connected in a new way. Capitals move from countries to countries, so as the service. Most of popular applications, like Instagram, Uber, they are available in more than one country and region.
Take an example of Tencent, the chinese IT giant owns business through various areas, such as Game, Social Platform, Cloud, E-commerce, investment and so on. It also has stock in hundreds of US companies such as Riot. How to prohibit a giant like this from moving forward? Stakeholders will be the first to stand up and support Tencent from being banned. This is also the reason why White House explained the order is only for Wechat and has nothing to do with Tecent’s other business.
The external disagreement between Chinese companies and US government is the usage of customer data, or we can say, the potential power of large customer database. The identity of Chinese companies makes US government feel uncomfortable that foreigners hold such a big amount of customer data, which relates to preference, habits and behaviors. If so, what happened to Facebook, Instagram and Twitter? Are they being banned in Europe or Africa? Does a government force them to sell their business?
The main problem I would say, is the unbalance between China and US. On the one hand, Chinese companies are exporting their products to US, not only apps, but also merchandise, service; on the other hand, US companies feel frustrated in entering Chinese market (the particular regulation of overseas-funded entreprise and Great Firewall are main reasons). The difference between two countries caused asymmetric results. More and more chinese companies expand their business successfully in US, but only a few US companies established branches in China, far away from break even point.
Back to our topic, I still believe there are opportunities for chinese companies in US market, after all the customer needs determine everything, not the order from White House. However, it’s time for the oriental lion to reconsider the feasibility of current regulations. Capitals need to circulate through both sides, one-side exportation will only arise new problems.