US-China Tech war: TikToK, WeChat remain in Washington’s crosshairs after Biden revokes Trump’s orders

Joe Biden’s new executive order directed the US Commerce Department to assess, in the following six months, any apps associated with foreign adversaries
The department will provide recommendations of actions needed to address the risks found at the end of the assessment

US-China tech war

Tracy Quin Shanghai

Published: 7:38pm, 10 Jun 2021

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The US operations of TikTok and WeChat remain at risk, according to analysts, as President Joe Biden directed a review of security concerns posed by these popular Chinese apps soon after revoking his predecessor Donald Trump’s executive orders, which sought to ban them.

“TikTok and WeChat are still in the crosshairs of the US government,” said Abishur Prakash, from Toronto-based consulting firm the Centre for Innovating the Future. “Depending on what the US finds, new action could be taken.”

Biden’s new executive order directed the US Commerce Department to assess, in the following six months, any apps associated with foreign adversaries of their potential national security implications and how American personal data is used.

The Commerce Department was asked to provide recommendations of actions needed to address the risks found at the end of the assessment. The agency was also directed to evaluate, on a continuing basis, transactions by software applications that may pose a risk for information and communication technology and services to operate properly in the US.

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US President Joe Biden drops Donald Trump orders seeking ban on China’s TikTok, WeChat

At a press conference on Thursday, China’s Ministry of Commerce spokesman Gao Feng said Biden’s decision to cancel the Trump administration’s orders was “a positive step in the right direction”.

Gao, however, indicated that the fate of hit short video-sharing platform TikTok and Tencent Holdings super app WeChat in the US was still uncertain in light of the new security review that Biden has ordered.

Apart from TikTok and WeChat, Biden’s new executive order also revoked another one Trump issued in January that targeted eight other Chinese apps, including Ant Group‘s Alipay and WeChat Pay. Ant is an affiliate of Alibaba Group Holding, the parent company of the South China Morning Post.

The latest move by Biden is another sign that his administration is continuing the hardline approach to China taken by his predecessor. While the Biden administration is reviewing many of Trump’s China policies, it has not revoked much existing legislation or many orders – including tariffs levied on hundreds of billions of dollars in Chinese imports.

Earlier this month, Biden expanded a ban that prohibits Americans from investing in Chinese companies that the administration says have ties to the Chinese military or sell surveillance technology used against religious minorities and dissidents.

The US, however, has not been able to completely cut itself off from Chinese technology. Last week, the US Department of Defence announced a reversal in their drone procurement policy that would allow two “Government Edition” DJI drones to be used by US agencies. SZ DJI Technology Co, the world’s largest drone maker, had been banned by the US military since 2017 over security concerns. In 2019, the Department of the Interior also grounded all non-essential Chinese-made drones.

TikTok owner ByteDance had been in in talks with US regulators since last year to address potential security concerns over data sharing. Photo: TNS

For Chinese tech unicorn and TikTok owner ByteDance, Biden’s latest directive continues its roller-coaster ride in the US, months after the company walked away from a deal to sell its American operations to a group led by tech giant Oracle. Tensions between the US and China have also set back ByteDance’s plans to go public.

“TikTok is not totally safe, and this is in effect a postponement to gain visibility on how best to extract value from TikTok as a political pawn caught up in the US-China competition,” said Lub Bun Chong, a partner of Hong Kong-based C Consultancy, “ByteDance needs to dance with the winds and make itself useful to both the US and China.”

Some TikTok competitors, such as Triller and Likee, have taken advantage of the app’s issues in the US. Still, TikTok installs jumped 35 per cent in May over the previous month, continuing its streak as the world’s most-downloaded non-game app, according to mobile market analytics firm Sensor Tower.

TikTok downloads jump 35 per cent in May, but down from peak last year

To help its efforts to comply with both US and China directives, ByteDance is likely to expand TikTok’s presence in Singapore, according to analysts.

“The ideal neutral venue to do this is Singapore,” said Chong of C Consultancy. “Singapore has remained relevant all these years by dancing with the winds and making itself useful to both the US and China.”

TikTok’s new chief executive, Shou Zi Chew, is a native Singaporean who also serves as chief financial officer of parent firm ByteDance.

Biden’s latest move may help improve TikTok’s situation in the US, according to Dov Levin, assistant professor of international relations at the University of Hong Kong.

“ByteDance should be able to already satisfy the key criteria described in [Biden’s] executive order in general, such as private ownership and general data collection practices in the US,” Levin said. He also suggested that the Biden administration’s tech policy remains under development and can “still shift and change in various ways”.