Nations and companies around the world are being sucked into a running battle over the future of technology between the United States and China, forcing them to choose sides in a conflict that is fracturing global supply chains and pushing businesses out of lucrative markets.
The latest casualty is TikTok, a video app that is popular with teenagers and which has hundreds of millions of devoted fans across markets such as India and the United States. The app is owned by a Chinese company, but run by an American CEO.
The first major hit came last month, when TikTok was blocked in India after a heated border clash with China left at least 20 Indian soldiers dead. Then, on Monday, US authorities said they would look at banning the app because they consider it a possible threat to national security. That news broke as the company said it would leave Hong Kong because of concerns over a sweeping national security law China imposed on the city.
“It is becoming harder to be a truly global tech platform,” said Dipayan Ghosh, the co-director of the Digital Platforms and Democracy Project at the Harvard Kennedy School.
The fight right now between the world’s two largest economies cuts to the heart of that issue. The United States and China are competing over artificial intelligence, super-fast 5G mobile networks and other technology. Although the countries have long-running economic ties that enable some collaboration, recent tensions over national security have pushed their governments and businesses to reconsider those partnerships.
The conflict is bleeding over into the relationships those countries have with other global powers, too. The United Kingdom, for example, is re-examining its decision to grant Chinese tech company Huawei the ability to help build the country’s 5G network. That review comes after the United States, which has repeatedly targeted Huawei, imposed sanctions on the company that could prevent other firms from supplying it with the chipsets it needs to build its next-generation technology.
“My impression is that the tech companies are only now waking up to the fact that life in the future is going to be a lot less globalized,” said Michael Witt, a senior affiliate professor of strategy and international business at INSEAD, the international business school. “They are really on the horns of a dilemma.”
–Hong Kong (CNN Business)