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As reported in the Wall Street Journal today (and also widely in other publications), the Biden administration is now demanding that, due to security concerns, the owner of TikTok, Beijing-headquartered Bytedance, either sell their stakes in the video-sharing app or face a U.S. ban. The question of sanctions or a ban against Bytedance have been rumbling in the background since August 2020, when Trump elevated the issue in the lead-up to the November election. Since that time, the Biden Administration has generally kept in place tough-line Trump-era policies vis-a-vis China, but has replaced Trump’s go-it-alone, chaotic style with a coherent approach well coordinated with U.S. traditional allies. From the outside looking in, the Bytedance issue was neither shelved nor resolved by the Biden Administration. It was in limbo. However, yesterday’s report suggests that the Treasury Department’s Committee on Foreign Investment in the United States — charged with making determinations about the admissability of (usually prospective) investments into the U.S. — has now come to a fully-vetted, interagency-coordinated determination. Bytedance either needs to fish (sell their stake in Tiktok) or cut bait (lose access to the U.S. market).
It’s a complicated and convoluted path that brought us to this point. What are the eight key facts to know to make sense of where we are and where this likely leads:
- IT AIN’T OVER UNTIL IT’S OVER: Yesterday’s report is reliable but neither CFIUS nor the Biden Administration have released any specifics officially. Even were that to happen today, the outcome is still subject to a process whereby Bytedance and its lawyers will have an opportunity to respond to the official demand.
- THE TOP-LEVEL SECURITY CONCERN: Data, data, data. Specifically, data about the 66 million Tiktok users in the U.S. which could fall into the hands of an adversarial government. To take a single example, think of facial recognition. Because privacy protections for individual citizens in China are de minimus and, more to the point, because the PRC government runs a globally-unrivalled surveillance apparatus to control its citizenry, facial-recognition technology is more advanced in China than in the U.S. or elsewhere. Combining China’s facial-recognition technologies with Bytedance’s trove of images of U.S. citizens could open a Pandora’s box of risk, both known and unknown.
- THE BEDROCK SECURITY CONCERN: Chinese hacking into the personnel records of 4 million current and former U.S. government workers in 2015 shows clearly that the PRC values, and will run risks to procure, data on U.S. citizens. The bedrock security concern in the U.S. is that as long as Beijing-headquartered Bytedance owns the video-sharing Tiktok app, the Chinese government can force Bytedance to turn over that data at any time. Unlike the U.S. or most other markets, there would be no meaningful legal mechanisms to protect Bytedance against a demand of this sort. And, as Xi and the CCP showed last year with its treatment of Alibaba, there is scant concern for damage inflicted on a technology-innovating market giant if it is deemed to serve the greater good (as defined by Xi Jinping).
- HURRY UP AND WAIT: It’s important to note that the first burst of attention to Tiktok came in the lead-up to the 2020 election and this apparent new burst of attention is happening as we approach primary season for the 2024 election. While there is broad and bipartisan support in governmental circles for the tough line on China which has been taking shape over the last five years, the Tiktok issue has recently been showing signs of developing a red vs blue fissure. Specifically, governors have been banning Tiktok on the devices of employees in their respective states. As of last month, 27 states had instituted such bans, including Florida and Texas. With a few notable exceptions such as Maryland and New Hampshire, the other states tend to be ruby-red. The Biden Administration was at risk of having its superb CHIPS Act front-line against China outflanked by a Republican rear-guard using Tiktok as a political cudgel.
- BETWEEN THE HAMMER AND THE ANVIL: Bytedance and Tiktok have tried various maneuvers to extricate their video-sharing app from its unenviable position caught between Beijing and Washington. For starters, Bytedance has tried to make itself invisible in the U.S. debate because of its obvious proximity to Zhongnanhai. Secondly, Bytedance and Tiktok have pushed Tiktok’s CEO, Singaporean Show Zi Chew, as the public face for Tiktok and pointed to its globally-distributed headquarters (in Singapore, in California and Texas-based offices in the U.S., and in Paris and Berlin and elsewhere) as reason not to fear the PRC’s control. And as recently as last week, Tiktok has publicly committed $1.3 billion to expand its Project Texas datacenters initiative in the U.S. and Europe to provide greater public transparency (into its data collection, algorithms, etc.) and to allow Oracle to scrutinize its internal data collection processes. These are all impressive dance moves but are not enough to stop the curtain being brought down on Tiktok’s U.S. show.
- THE NEAR UNSTOPPABLE DRIVER: Politics, politics, politics. Tencent’s WeChat has been proven to be a more nefarious platform for siphoning data from U.S. citizens and delivering it to PRC security minders. However, WeChat (and its Chinese language Weixin) is not widely-used in the U.S. among non-Chinese speakers. It’s therefor mostly invisible to U.S. government politicians and regulators. Tiktok, on the other hand, is virtually ubiquitous among young users, the generation which includes the children of those politicians and regulators. As attitudes toward China continue to darken in response to the last five-plus years of Xi Jinping’s overreach, the “Tiktok threat” has become the simplest and most potent storyline to channel fear of China.
- THE BOTTOM LINE: Plaintively but quite accurately, Tiktok’s official spokesperson, Brooke Oberwetter, responded to news of the Biden Administration demand yesterday by saying, “If protecting national security is the objective, divestment doesn’t solve the problem: a change in ownershiop would not impose any new restrictions on data flows or access.” In fact, much of the data which U.S. government officials and regulators are seeking to protect through this policy toward Tiktok could be procured — albeit very laboriously and expensively for Chinese spy agencies — through commercial transactions on the darkweb. The ultimate solution to guard against the risks associated with Tiktok and other Chinese social media platforms is for the U.S. to institute stronger consumer privacy protections across the board affecting all social media platforms — Chinese, U.S. and other. Obviously, U.S. Big Tech doesn’t want to see this and, equally obviously, this is a bridge too far for the U.S. Congress to consider as we head to the 2024 electoral primary season.
- THE FINAL OUTCOME: Those with reason to know the final outcome won’t be talking and those who are talking don’t likely know. I am squarely in the second camp but I will hazard a guess. The threat to force Bytedance/Tiktok to sell off its U.S. Tiktok holding was made earlier in the Trump Administration. Characteristically, it was delivered mostly as top-of-his head muttering by Trump himself and didn’t carry the institutional heft of the Biden Administration’s lengthy CIFIUS review. But then, just as now, the demand does not bring about an immediate outcome. It initiates what is effectively a high-stakes business and legal negotiation between the U.S. Government and Bytedance/Tiktok leadership. While unlikely at this point, the either/or could even morph into some third-way which would take time for both sides to explore thoroughly. It’s now a more coherent and higher-stakes ultimatum, but it’s the same ultimatum Bytedance/Tiktok was given two and a half years ago. Biden now has his political flank reasonably well protected from Republican China-bashers. I expect the final resolution of all this to take some time. But the clock is ticking. Tick tock …
In my network, there’s a lot of interest in — and considerable disagreement over — the meaningfulness of the PRC statement of principles toward resolving the Ukraine crisis released on Friday. I gave my on-the-spot personal view in the post 1% Words, 99% Work on the day of the statement’s release but, since then, I have been fielding comments and questions from a number of friends and associates.
I am going to share here one of those conversations. The questions were posed to me by another college classmate, in this case a person with a lifetime of deep and wide professional experience in China. I hope that these questions and answers might prompt readers of Assessing China to continue to think about this issue in a curiosity-forward and thoughtful way.
Here is the Q&A exchange:
What factual inaccuracies do you find in it (the official PRC Position on the Political Settlement of the Ukraine Crisis)?
- It’s important to note at the outset that this is a position paper (clarifying the PRC’s own position) rather than a peace proposal (aimed at bringing the two warring sides together). With that in mind, the PRC is perfectly entitled to set out their position in any 12 — or any 120 — points which they chose. However, it is also clear that they are using this position paper in order to position themselves to be seen as a potential mediator between the two warring parties. Whether they pull off that positioning exercise depends both on whether the PRC proves ready, willing and able to play that role and whether key parties to the conflict support them playing that role.
- Factual problems are only one dimension of what can be problematic in a document like this. On the factual inaccuracy front, I will limit myself to the very first point. Since 1945, there has been no definition of sovereignity which squares with Russia’s invasion. To this day, China has backed Putin’s language (a special military operation, not a war or invasion) and its worldview (revanchism and restoration by force of past empire are legit). If you can’t get past the first principle, it’s hard to take the rest of the document seriously. For the rest …
- Point 2: A dig at the U.S. An assertion with no real substance.
- Point 3: The question is how and under whose terms: 21st c. norms of forward-looking sovereignity protecting the rights of citizenry developed over the past 75+ years or the Putin/Xi aggrieved, backward-looking version all in the mind of an individual leader with the power to enforce conformity to his — it’s usually a man — viewpoint
- Point 4: We can all hope for peace talks but neither of the warring party appears ready to consider these. They each hope to establish a position of strength before entering into them. Temporary stalemate.
- Point 5: There’s a lot China could do unilaterally on this point. Words are cheap. The U.S and the West have demonstrably done a lot already. China?
- Points 6, 7, 8 & 9: Who has been the responsible party for these specific problems? Hardly a gray area to my mind. Russian summary execution of captured soldiers and civilians in Bukha and other villages they invaded and occupied. Russian forcible evacuations of children to camps in Russia. Russian sustained artillery assaults on the nuclear plant at Zaporizhzhia (not to mention indiscriminate attacks on civilian infrastructure). Russian interdiction of Ukrainian grain exports at ports and railways. What are the comparables from the Ukrainian side? I personally don’t think there are many but, in any case, law always gives special consideration to the responder rather than the initiator, the defender rather than the attacker.
- Point 10: Equivalent to stripping Ukraine of one of the ways which the world community has provided to help them defend themselves.
- Points 11 & 12: We can all agree that these would be desirable
And what’s your view on why U.S hegemony has been good for the world for the last 70 years, despite some of the bad that we did?
- I’ll just offer two points of response
- Providing the world with a longer period of sustained peace — not perfect of course but far better than anything that preceded it — and also more measurable human advancement (educational, health, wealth, human rights) than previously achieved at any point in history
- Providing China with the opportunity, tools and resources to help raise 800 million of their citizens out of poverty
If “U.S. hegemony” is just part of China’s ideology, isn’t “democracy vs. autocracy” part of our ideology?
- I quite agree with you about the “U.S. hegemony” as contrasted with the “autocracy vs democracy” point. There are levels to that though and I focus on the third level:
- Level 1: both terms are established political science terms and describe real things in international behavior
- Level 2: as is their right, both Beijing and Washington choose to amplify the political concept that best suits their purpose
- Level 3: I come down against ceding there is equivalency between the two for two reasons:
- Focus on ‘hegemony’ is rooted in a sense of historical grievance and doesn’t offer the world much unless other players share that grievance and all agree to do something about it. ‘Authoritarianism vs democracy’ draws a clear distinction between two different systems and encourages everyone to think about, and ultimately choose, their preference. Xi is at liberty to assert China offers a superior form of democracy to Western liberal democracy. Not many governments or people around the world seem to buy into that. The U.S. has over 65 formal allies based on shared values rooted in liberal democracy and the post-WWII order. China has one — North Korea — and is working hard at adding Russia and Iran to the list
- There’s no inherent accountability to Xi’s and China’s use of the term hegemon in describing the U.S. Top-down and echoed throughout a propaganda apparatus which can’t be questioned because, as Marxist-Leninist doctrine holds, it definitionally represents what is best for the people. In the Biden Administration’s amplifying of “authoritarianism vs democracy” however, it can be questioned and jettisoned come January 2025 if that is the will of the majority of Americans.
Washington had been urging China since the beginning of Russia’s war to play some role in peace negotiations, and now it has offered to do so, outlining the basic principles. I think that’s a good thing. The U.S. cannot be an honest broker, nor can any country in NATO. Perhaps China could pay a useful role in stopping the fighting.
- I think what the U.S. has been urging China is (1) aspirationally, to encourage China to come down from fence-sitting and use its suasion with Moscow to promote post-WWII norms of sovereignity (versus might makes right) but (2) more importantly not to aid and abet the instigator in this war of choice with sanctions-cushioning actions and (c) definitely, definitely not with sanctions-evading support and supply of lethal munitions. China has chosen to completely reject (1) and (2) and, as for (3), is in advanced negotiation with Russia to set pricing and scale of supply for offensive drones and ammunition, possibly also artillery.
- The U.S. and NATO don’t offer themselves or pretend to be honest brokers. They have clearly taken the side and will continue to take the side of Ukraine since Feb 24, 2022. The fundamental problem is that China is trying to have its cake and eat it too — on the one hand, giving consistent, significant and now increasing levels of support for Russia over the past twelve months while also now posturing with this position paper as a potential honest broker. I share your hopes and think its good that Zelinsky will meet with Xi. I just don’t expect that, in the final analysis, much will come of it for the reasons outlined above.
My concluding comment: I commend this interlocutor for asking thoughtful and useful questions. Many of the exchanges I had were with people who wanted to convince me that their interpretation of the situation was the correct one. One of the common denominators of those perspectives seems rooted in fear … fear of the Ukraine crisis spilling over into nuclear strikes, fear of the U.S. government missing a chance to work with China to resolve the situation, fear of the U.S. finding itself on the wrong side of history as Brazil, Hungary, Saudi Arabia, Turkey, South Africa, India and Indonesia gravitate into a Chinese orbit. I personally do not share those fears. In fact, I believe that the surest way of avoiding any of those scenarios becoming even plausible is for us to lose the clear-sightedness and the bedrock values which have guided our reaction to Russia and China since February 24, 2021.
The three-hour face-to-face meeting in Bali between President Biden and President Xi — their first non-virtual meeting in over three years — concluded just over an hour ago.
Much can be said (and is already in digital print) looking at this meeting from various angles:
- History of Biden’s personal relationship with Xi
- Composition of the small delegations accompanying the heads of state and what those choices say
- The wide range of issues discussed including Taiwan, Russia, nuclear arms (and their possible use in Ukraine), North Korea, human rights, resumption of national level cooperation on issues of climate change, health security, global food security, and defense-related communications (to forestall accidents and misunderstandings), etc.
- Differences in the official post-meeting read-outs from the two sides and what those differences signify
- Atmospherics of the meeting — effect of recent boosts to each leader’s domestic standing; implications of the third-party location on periphery of G20, etc
But I will go to what I believe to be the heart of the matter. The bottom line, both immediately and over the medium term:
CONTEXT: Gauged charitably, U.S.-China relations are at their lowest point since at least 1991 (post-Tiananmen and pre-Deng’s Tour of the South). Gauged more hard-headedly, they are in their worst shape since before Nixon’s visit to China in 1972 to begin dialogue and explore a relationship amid the Cold War freeze. The vertiginous decline we’ve been experiencing in recent years started very gradually as far back as 2008 when the (Western) Financial Crisis put shortcomings of the Washington Consensus on display in Beijing at the very moment when China was basking in its success in hosting the 2008 Summer Olympics. The hardening of attitudes became personified on the Chinese side with the emergence of Xi Jinping as paramount leader in 2012. Over the following years, the on-going decline in political relations — as contrasted with ever-strengthening commercial ties — became exacerbated for the Obama Administration as China militarized islands in the South and Southeast China Seas, brazenly breaking a commitment Xi had personally given Obama. It was then personified on the U.S. side starting in 2015 with Donald Trump’s racially-tinged campaign and, following his election, by his go-it-alone crusade to punish China with sanctions and Oval Office invective. The rhetoric was answered in 2017 by Xi Jinping upon his re-election as Chinese Communist Party (CCP) head in the form of an uber-triumphalist speech he delivered from the 19th Party Congress stage. The flash-points multiplied during the pandemic with China working hard to obscure the origins of the Covid-19 outbreak and subsequently using its heavy-handed Zero-Covid policy as the linchpin for Xi’s claim that China offered the world a superior system to liberal Western democracy (a claim which non-Western Taiwan makes a mockery of every day and which Hong Kong once also challenged prior to its being brought to heel brutally by Beijing in 2020). The deterioration continued in 2021 as the Biden Administration disappointed Beijing by not reverting to the softer, Obama-era approach to China that the Chinese leadership in Zhongnanhai had expected. Instead, the Biden Administration worked assiduously and with considerable success, to build a broad, values-based partnership with traditional allies and other aligned countries to answer China with a solid front. The Peoples Liberation Army’s practice-run blockade of Taiwan following House Speaker Pelosi’s visit to Taiwan in August further accelerated the downward spiral. And, while not yet fully appreciated by the American public, passage of the Biden Administration’s CHIPS Act into law in August is perceived in China, rightly, as a policy dagger pointed at the heart of its aspirations for seizing dominance in 21st c. technologies for defense, aerospace and space, surveillance and security, and industrial automation and productivity. (It is with the set of issues in these last two sentences — the interlinked issue of Taiwan and the CHIPS Act — that the Assessing China blog is now focused).
THE BOTTOM LINE: The bottom line of today’s meeting is Taiwan. While both sides settled in their separate post-meeting read-outs on emphasizing the lowest common denominator assertion that they’re now working together to stabilize an unstable relationship, their agendas going into the meeting were clearly different. For the Biden Administration, stabilization was the goal. It was enough just to establish a floor to stop further relationship decline and to limit the negative impact further decline would have on the range of issues under discussion (see above). For Xi, the goal was something more — to leverage agreement to stabilize the relationship toward the end of prying out some glimmer of affirmation from the U.S. side to validate his stance on Taiwan. With his eye on 2027 (21st Party Congress) and 2035 (a key CCP goal for China’s development) and with a domestic lock-hold for the next five years in the form of his new Standing Committee of loyalists, Xi is turning his attention — and ambition — to the international sphere. That means Taiwan as the culmination of his China Dream (and, I would wager, the fulfillment of the backroom deal he likely crafted with the CCP in 2012 to let him off the two-term-limit leash). In Xi’s thinking, if the U.S. could commit to the Shanghai Communique in earlier years, he should push as a next step for formal U.S. acceptance of his claim on Taiwan. As Xi put it, Taiwan is “the very core of our core interests.”
The bottom line of their meeting in Bali today may then be that Xi, just like Putin with Ukraine, misreads U.S. politics and society and the resolve of most of the international community concerning Taiwan. The evidence for this view would be the public read-outs: Biden achieved his chief objective while Xi did not.
But another view is possible. As Xi has demonstrated over the last twelve years, he is willing to take large risks to achieve the China Dream but he is methodical about how he goes about taking those risks. Militarization of the South China Sea and the ruthless imposition of the Basic Security Law in Hong Kong are just two examples. Militarily, China has been modernizing and arming up with laser-focus on deterring the U.S. in the Strait of Taiwan for far longer than the Pentagon has been taking steps to respond. As a result, the window of opportunity for Xi to move militarily is expected to be at its widest around 2027 or 2028. Following that, the belated U.S. military revamp in the region will be coming on stream and narrowing that window with each passing year. (It’s worth noting that 2027 coincides with the next Party Congress and therefore coincides well with the ‘chapter structure’ of the narrative Xi has been building about his stature as not only a peer of Mao Zedong in the Communist era but as a Chinese leader of destiny for the ages.)
So does the “failure” of Xi’s bottom-line agenda regarding Taiwan at today’s meeting indicate that he misreads Biden and the U.S. political system? Or might he instead be playing a longer game to a wider audience? If Xi’s sights are indeed firmly fixed on the 2027/8 moment (not only militarily but also politically and in the eyes of history) and if he is focused on exploiting that window of maximum military opportunity, his failure today to make any headway toward some type of formal understanding with the U.S. regarding Taiwan may be exactly the point.
The choreography may be designed to show Xi making a concerted effort to get the U.S. to more fully acknowledge his claim on Taiwan. Xi probably recognizes this won’t happen. The U.S. will not cut a deal with an autocrat to throw 23 million people in a thriving democracy under the bus. But Xi can use that show of effort over the next few years to advantage. He will have made a show for the world to see of having tried hard to exhaust “peaceful measures” prior to being “forced” to make a military move on Taiwan. He will have checked that box. And it won’t be a coincidence if the moment of being “forced” happens at the same moment of the PLA’s maximum military advantage.
______Assessing China / The TEA Collaborative______ 