Reviews | Why the United States should fear a crackdown on big Chinese tech

On one subject at least, Mark Zuckerberg was right.

Three years ago, in an interview with me – while trying to dodge questions about the growing problems of disinformation on Facebook – he shifted the conversation about China’s growing dangers across the digital landscape. He argued that tech companies like his need to be big, if only to fend off challenges from the Asian giant and its increasingly powerful government-controlled companies.

“If we take a position that is, ‘OK, we’re going, as a country, to decide that we want to cut off the wings of these companies and make it more difficult for them to operate in different places, where they need to be smaller, ”then there are a lot of other companies,” he said, “that are willing and able to take the place of the work that we do. Essentially describing a tough choice for internet leadership between himself and Chinese President Xi Jinping, he added, “And they don’t share the values ​​that we have. “

Although I didn’t believe his “Xi or me” argument (maybe there is a third option?), He was right.

In recent weeks, the Chinese government has taken a stand against Didi, the country’s flagship ridesharing company. He made a spectacular debut on Wall Street at the end of June, which caused Beijing government leaders to laugh at his fast tires almost immediately in stop new user registrations and remove Didi from app stores. As with everything that happens in the authoritarian country, the reason is surrounded by double talk about privacy, cybersecurity, and sensitive location information – particularly rich, coming from a place that has essentially turned into a surveillance economy.

You can certainly make the same accusations around the world regarding the abuse of personal data by tech giants, especially in the United States. But the twin forces of taking full control and allowing innovation to roam collide in much more troubling and malicious ways in China.

The actions taken by the Xi government against Didi represent terrifying government action. It was followed by even more moves against several other Chinese companies, all of which have recently listed their shares on the US stock exchanges.

After meetings with government officials this year, ByteDance, the Chinese company that owns TikTok, said it was delaying its initial public offering efforts due to concerns over data security risks. Translation: He had also been intimidated by an aggressive government.

As the New York Times noted of all these actions: “They send a clear message to Chinese companies about the government’s authority over them, even though they operate globally and their stocks are traded at. abroad. And they remind international investors in Chinese companies of the regulatory curveballs that can sometimes get in their way. “

It is clear that the Xi government is cracking down on Chinese companies that list their shares on American sites, removing a control mechanism. If you were the government, worried about the growing power of technology, and had no democratic rules to follow, this decision makes sense, in a weird way.

The United States and China are vying for dominance in the next digital age, encompassing artificial intelligence, quantum computing, autonomous transport, automation, and more. In addition, China’s Ministry of Industry and Information Technology has released a draft plan to develop its cybersecurity industry, a space it hopes to dominate globally.

Now it’s an end-to-end fight for companies and their technologies that have no borders, even though they have a country. Choosing a side is the order of the day – an imperative highlighted as Didi executives swiftly moved to assure its nearly 400 million active Chinese users that they had not passed on their information to the United States.

Of course, they didn’t. But they still had to bow and scratch to Xi, after seeing the crackdown on Jack Ma, China’s most famous and popular tech entrepreneur. The government put the kibosh on the initial public offering of Ant, its fintech phenomenon, and put it in the penalty box.

For years, the energetic Mr. Ma and the leaders of Didi have been celebrated for their innovative spirit and generously rewarded. In my numerous interviews with them and with other Chinese tech leaders, I have observed a maverick streak and a cheeky version of capitalism.

Not anymore, because China is bringing power back to the center. The nicest interpretation of what he is doing is that he is trying to force fair competition to prevent monopoly power that could eclipse and even threaten the government’s iron fist.

It’s getting worse. The government also attacked a video platform run by ByteDance which it said glorified underage pregnancy, and another for vulgar content. And in Hong Kong, once a stronghold of internet freedom in the region, disturbing new rules limit what is said online, which could lead to the departure of US companies that protested them.

It got even more bizarre earlier this month when one of the country’s largest internet companies, Tencent, added facial recognition in a bid to restrict underage gamers, in line with China’s cyber curfew laws for video games. By the way, the conglomerate has big investments in American companies like the owner of Fortnite, Epic Games, and others.

This continued mix of tech companies on a global scale will only worsen amid escalating tensions between the United States and China and make much-needed cooperation increasingly difficult. This is especially true when each country has such different values ​​when it comes to privacy.

What does this kind of aggression mean for the United States?

First of all, it means a continuous fork in the Internet. This is not good for the innovation drive anywhere, as countries create the digital version that works best for them – a blow to the idea of ​​a free and open global internet. As these diverge, it will lead to other problematic compromises on the part of big US tech players like Apple. It also means a race between China and the United States over which digital infrastructure will be deployed, with a competition already taking place on fast 5G mobile technology.

There aren’t many great options for the United States other than restricting business with Chinese companies, keeping American data off Chinese servers, and other retaliatory measures. While the Trump administration’s efforts to curb TikTok were primarily a political masquerade, this might be an option the Biden team will need to consider. This could lead to escalations that would affect the very strong global hardware supply chain, which relies on China.

It is perhaps not surprising that internal repression has been accompanied by increased external aggression. Today, the Biden administration officially organized allies to accuse China of paying hackers to attack digital systems around the world.

In other words, it’s a burning mess – much like the one Mr Zuckerberg will always face at the national level with growing regulatory oversight. He certainly still has a lot of important controversy to answer, which President Biden pointed out last week when he accused social media of “killing people” by harboring misinformation about vaccines. But Mr. Zuckerberg was saying at the time that we might want to start spending more time thinking about China.

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