The most daunting challenge Chinese tech firms faced abroad used to be convincing consumers of the quality of their products. But the rapid rise of big names such as TikTok and Xiaomi has given way to a new obstacle that experts say is harder to beat: persuading foreign governments that Chinese businesses are only trying to pursue profits rather than Beijing’s political agenda. Around the world, suspicions have been rising about Chinese tech companies’ relations with authorities at home. The new US administration under President Joe Biden is reviewing the country’s policy towards ByteDance , the Chinese firm that was given an ultimatum by the Trump administration last year to sell its American TikTok operations. In India, the short video app remains banned along with dozens of other Chinese apps. Both the US and Indian governments have cited national security as a reason for their actions. Smartphone maker Xiaomi is trying to clear its name after the US Department of Defence designated the Chinese company an affiliate of the People’s Liberation Army. The move, which would bar Xiaomi from receiving American investments, is currently on hold . These developments – along with US scrutiny of Chinese drone manufacturer DJI and Zoom , the videoconferencing tool launched by Chinese-born American entrepreneur Eric Yuan – are some of the most prominent examples of growing foreign mistrust against tech companies with any Chinese ties. While these businesses have repeatedly denied that they share user data with Chinese authorities, the country’s state-led economy and laws are not helping their case, according to analysts. “Unfortunately, the challenge facing Chinese tech companies is not so much about their actual behaviour – whether they have indeed handed over foreign citizen data to the Chinese government – but about how to prove that they have not and will not,” said Liz Liu, an assistant professor at Georgetown University who researches the intersection of tech platforms, users and governments. Data has often been dubbed the new oil, said Li, but unlike oil, data can be easily transferred across borders. This leaves data outside the control of users and governments, sparking concerns about not just Chinese tech companies, but also those from Russia and even the US. Chinese laws that compel domestic companies to cooperate with government authorities, however, exacerbates the scrutiny on Chinese companies. China’s National Intelligence Law requires organisations to work with state intelligence. The Cybersecurity Law obliges businesses to store user data within China and submit to government-conducted security checks. “It’s very unlikely that anyone could resist any request to have access to whatever data is being held, and then essentially not face some sort of penalty or sanction in China,” said a lawyer focusing on Chinese data law who asked not to be named due to the sensitivity of the issue. “I feel a bit sorry for the Chinese tech companies, because a lot of them are the victims of much wider politics,” the lawyer said. “It’s not really their fault they’re having to comply with laws that they cannot essentially get around.” The vagueness of Chinese data laws also justifies the scrutiny of Chinese tech to a certain extent, according to Kendra Schaefer, head of tech policy research at Beijing-based consultancy Trivium. Right now, Chinese companies still lack a clear set of domestic laws that they can point to when questions surrounding data access arise, she said. Schaefer, though, believes that there are misunderstandings over the aims of upcoming data laws that China hopes to realise in the next five to 10 years, including the draft Personal Information Protection Law and the Data Security Law. As part of the country’s 14th five-year plan , China hopes to build up its digital economy by shoring up its data security regime to allow certain data to be shared. “China very much has a vested interest in allowing data to flow across borders and getting its big tech giants like ByteDance, Alibaba and Tencent to be able to operate outside of the country,” said Schaefer Policymakers have been aware that the lack of clear policy is causing major problems. Even if China had solid data privacy regimes, however, suspicions could remain that the government would simply demand user data whenever it wants to, Schaefer said. “The ultimate concern is actually not about what’s written in Chinese law; the ultimate concern is a distrust of China,” she added. These concerns are fanned by Chinese tech firms’ reluctance to go against the authority in public, as opposed to their Western counterparts. Western tech giants have occasionally demonstrated their willingness to keep user data from the government. When the US Federal Bureau of Investigation asked Apple to extract data from two iPhones from a mass shooting suspect in 2016, the Californian company declined, arguing that the intrusion would amount to a “back door” that could compromise all iPhone users. In China, however, similar cases have been sparse. The most notable instance involved giants such as Alibaba Group Holding, the owner of the South China Morning Post , and Tencent Holdings resisting requests to hand over financial data to national credit agencies headed by the central bank. “Even if firms turn down the government’s data request – actually there were reported incidents – it would be difficult to know because firms rarely challenge the government in public,” Liu said. In reality, there is constant bargaining behind closed doors between firms and regulators, said Liu. Fragmented political power among various ministries and different levels of government has created room for intensive lobbying. Chinese companies cannot cite these private negotiations as examples that they will safeguard user data, however, especially in countries “with a strong anti-China sentiment, where regulators may assume that all Chinese firms are somewhat linked to the Chinese state”, said Liu. US billionaire Peter Thiel calls bitcoin a Chinese financial weapon Deep-rooted suspicion persists despite attempts to show that Chinese tech companies are no more of a danger than their global peers. While a recent study by the University of Toronto-affiliated research group Citizen Lab concluded that TikTok does not pose a national security threat to the US, new privacy concerns continue to surface over the app. Most recently, Irish Data Protection Commissioner Helen Dixon expressed worries that engineers in China may be able to see the data of European TikTok users. This year, China’s internet trinity of Baidu, Alibaba and Tencent – known collectively as BAT – ranked among the lowest in ensuring user privacy and freedom of expression on their platforms in the Ranking Digital Rights index. “China’s system of authoritarian internet control has inescapable consequences for Chinese companies [in the ranking],” said Rebecca MacKinnon, founding director of Ranking Digital Rights, in the February report. Besides Chinese laws, a blurred line between the private and public sectors in China also contributes to the perception that Chinese tech companies are intrinsically tied to the Chinese government. China’s digital dreams at risk from black market for personal data China’s largest internet platforms boomed in the country thanks partly to Beijing’s Great Firewall that keeps out powerful foreign competitors. At the same time, Chinese tech giants often participate in private-public projects. Health codes, a government-backed system that has helped track the movement of citizens during the Covid-19 pandemic with apps, was rolled out with the help of Alibaba and Tencent. “I would argue that in working in assisting the Chinese government with building its cloud and its digital currency, et cetera, that it is going to backfire on Chinese companies outside of China, because they’re going to be seen as proxies of the state,” said Alex Capri, a research fellow at the Hinrich Foundation, a charitable organisation supporting studies on global trade. As more countries bring data privacy rules into their legal frameworks, Capri expects that the world will inevitably see more bifurcation, with some companies being excluded in certain parts of the globe. “I think it’s a pretty bleak time right now for Chinese tech companies, even at home,” said Capri. “But overseas, it’s an existential cris