- The Trump administration is trying to ban the Chinese social networking program TikTok over alleged data safety concerns.
- While national security issues seem overblown, this move is well-deserved revival for China.
- The Chinese Communist Party has routinely undermined U.S. companies in their country, and it is time to return the favor.
President Trump is going to ban the popular Chinese video-sharing app TikTok. The decision, while controversial, is a step in the perfect direction towards rectifying the relationship between Washington and Beijing.
While concerns about information privacy and censorship are probably overblown (Tik Tok is no different from Facebook in this regard), there is an economic angle that a lot of people are overlooking.
For years, the Chinese Communist Party (CCP) has flagrantly and routinely undermined American businesses through compulsory joint-ventures, intellectual property theft, and protectionism. It is time to return the favor.
Occasionally fighting fire with fire is the ideal form of financial self-defense, and U.S. authorities will need to level the playing field between American companies and their Chinese counterparts.
An Unfair Deal
The economic relationship between China and the U.S. has been lopsided. China provided cheap, skilled labour, and consequently, the U.S. outsourced a massive chunk of its entire manufacturing base to the Asian state. China utilized this chance to replicate American production processes throughout driven technology transfers and joint ventures.
American firms tolerated this unfair situation for a chance at access to China’s massive consumer marketplace, but the CCP has jeopardized them each step of the way.
The CCP banned Facebook at 2009–allegedly over its role in facilitating communication among Xinjiang separatists. China went on to ban Google in 2010, simply to replace it with a vastly-inferior copy-cat called Baidu (NASDAQ:BIDU). American companies that have not been banned have seen their market shares tank because of property theft and CCP sabotage.
American Companies Are Being Forced Out of China
According to a poll conducted by the Beijing-based American Chamber of Commerce in China, U.S. businesses are having a hard time at China–thanks in part to the activities of this CCP.
More than half of respondents in the technology sector say they are abused in comparison with their Chinese counterparts. Nearly one-fifth of respondents are currently thinking about moving capacity beyond the nation or have moved.
The situation is so bad it has even affected China-based YouTube vloggers, many of whom fled the country due to government harassment in overdue 2019.
Trump’s TikTok Ban Is the Right Move
On July 31, President Trump supported his plans to ban ByteDance’s TikTok program from operating in the USA, a move the administration had been occupying for weeks. There is still some doubt about how the ban will be enforced.
Based on Reuters, ByteDance has agreed to divest TikTok’s U.S. surgeries to Microsoft (NASDAQ:MFST), which is now in charge of protecting all of TikTok’s American user information. It’s still unclear if this bargain will be accepted by Trump — or should he has the power to deny it if he doesn’t.
Either way, it’s time for the U.S. to fight fire with fire and treat Chinese companies the exact same way China treats American companies. Banning TikTok is a fantastic first step.
Disclaimer: This article reflects the author’s opinion and should not be considered investment or trading advice from CCN.com. The author holds no investment standing in the above-mentioned securities unless otherwise noticed.