HONG KONG—As Trump and China hawks lock horns with Beijing on TikTok, trade, and Huawei, the Chinese Communist Party and its leader Xi Jinping are threatening to target U.S. companies with similar nationalistic bans—and signalling to Chinese firms at home that they expect total loyalty.
Private Chinese companies that have managed to establish a foothold on U.S. shores increasingly rely on the CCP’s backing, particularly when the Oval Office decides to place them within its crosshairs. Some do this by choice, others because they have no other option when they head overseas. In any case, in Xi’s view, they are one clan, one tribe, and they need to stick together, with the party at their core.
Speaking to entrepreneurs in 2018, Xi indicated that the public and private sectors in China are, in his view, one and the same. He said, “The public economy and non-public economy ought to be complementary, not opposing or offsetting. This is written in the constitution, in party articles. It cannot change.” To top it off, Xi told the execs who sat before him (and others who would read the transcript later) that “we’re all a family.”
The caveat is that the patriarch of this family demands subservience and respect, and his word-bearers are eager to remind everyone else of their station.
Last week, Ye Qing, the vice chairperson of the All-China Federation of Industry and Commerce—a nominally non-governmental chamber of commerce that in reality is linked to the CCP’s United Front Work Department, which is charged with exerting influence in elite and wealthy circles at home and abroad—gave a speech to map out how CCP committees must be embedded within private companies and become part of decision-making processes.
If private enterprises benefit so much from “the system,” Ye opined, then it is only expected that these entities safeguard the system and the party that shapes it.
This idea goes beyond speeches given at exclusive gatherings. Business leaders in China are expected to participate in pomp and practice. Just last year, the C-suite executives of 45 top Chinese tech companies were corralled by the country’s internet watchdog to visit sites that are politically and historically significant for the CCP, as part of a “study tour” and “celebration” of Mao Zedong’s deeds. A local newspaper reported that the tech execs “relived the red memory” to “inherit the revolutionary spirit.”
It is no secret that professional success in China is at times dependent on joining the Chinese Communist Party, and many people who fill its ranks do not subscribe to the party’s ideological or nationalistic bent. But having one’s name on the party’s rosters muddles the relationship between state and private enterprise in a market socialist economy, a condition that party leadership has exploited more than ever in recent years as Chinese companies attempt to become globally recognized names.
The latest example is TikTok, a video app that was developed by ByteDance, a Beijing-based tech conglomerate that was already the subject of an investigation by the Committee on Foreign Investment in the United States, or CFIUS, before Trump issued an executive order in early August to ban transactions related to the app, suggesting that it posed a “national emergency with respect to the information and communications technology and service supply chain.”
On Sunday, the nationalistic state media outlet Global Times said the Chinese government would likely approve what it called a “reasonable” deal for TikTok. But that changed the following day, when it said the arrangement that involves TikTok, Oracle, and Walmart was “unfair” and that Washington was applying “hooligan logic” to wrest control of a Chinese-owned business that has found success in the U.S.
Hu Xijin, the chief editor of Global Times, argued that if TikTok needed a “trusted” partner from the U.S. to operate in the country, then the same should apply to American businesses that want to make money in China. He wrote in a tweet on Monday, “The US restructuring of TikTok’s stake and actual control could be used as a model and promoted globally. Overseas operation of companies such as Google, Facebook shall all undergo such restructure and be under actual control of local companies for security concerns.”
Hu’s outlet also said that “Chinese companies cannot be turned into lambs that are slaughtered by America, one by one.”
On Wednesday, another state media outlet, China Daily, took a slightly softer tone and wrote that what the Trump administration has done to TikTok was “dirty,” “underhanded,” “extortion,” and “almost the same as a gangster forcing an unreasonable and unfair business deal on a legitimate company.” At the moment, Beijing’s earlier optimism has been completely replaced by a sense of indignity, and the party’s news workers, as they are called, are pouring ink and pixels into expressing just that.
This is not the first time the Chinese government has voiced its displeasure about how Chinese companies are treated by Trump. After the U.S. applied sanctions on Huawei, state media has regularly published articles to voice unabashed support for the company, echoing foreign ministry spokespersons’ criticisms of the “U.S. suppression” inflicted upon the telecommunications hardware provider. While the Chinese government and Huawei both vehemently deny any links with each other, the two are consistently mentioned in the same breath.
In response to U.S. sanctions on Huawei, China’s commerce ministry is drafting a list of American companies that may be the targets of sanctions, sales and investment restrictions, or other forms of punishment. The ministry said the blacklist is “strictly limited to a very small number of illegal foreign entities.” For now, Chinese officials have not decided whether they will act before the November presidential election in the United States, the Wall Street Journal reported.
After this all shakes out, the CCP will have even deeper involvement in China’s private industries, particularly those that need to lean on Beijing’s power to negotiate business environments abroad. And in the U.S., concerns about national security or data privacy will likely remain unaddressed. Hastily cobbled together, any new structure for TikTok’s global operations is a foil for the erratic, self-contradicting patterns of decisions that come out of the Oval Office, where Trump attempts to look tough on China, but in so doing swings a gilded wrecking ball through the United States’ governmental processes, like sober examinations of data security and information influence concerns.