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What Is The Future Of Chinese Tech Companies In The U.S.?


First, President Trump started a trade war between the U.S. and China. Now the two rivals seem to be at war over technology. In June, the U.S. designated telecom company Huawei a threat to national security. Today, the focus is TikTok. President Trump floated the idea of banning the social networking platform that millions of Americans use. TikTok's parent company in Beijing is considering selling to Microsoft. Adam Segal directs the Digital and Cyberspace Policy program at the Council on Foreign Relations, and he joins us now to talk about the future of Chinese tech companies in the U.S.

Good to have you here.

ADAM SEGAL: Thanks for having me on.

SHAPIRO: You know, experts say TikTok does not harvest any more user data than Facebook does. So what makes the Trump administration so nervous about this platform?

SEGAL: I think two things. First, according to the 2017 national intelligence law in China, all Chinese companies, entities appear to have to cooperate with the intelligence services. So there's a fear that that data will be turned over to the Communist Party and to the Chinese government. I think also TikTok represents a symbol for the Trump administration of the first global social media company to emerge out of China, and it's a challenge to the U.S.'s domination of the Internet.

SHAPIRO: You know, for years, we have seen China either ban U.S. tech companies or restrict them unless they agree to play by Beijing's rules. Do you think what we're seeing from the Trump administration is similar to that?

SEGAL: It is. Unfortunately, I think it is a degree of reciprocity. As you said, U.S. firms have been banned in China for a long time. But I think the problem for the United States is that we've always encouraged the free and open Internet. And so if we seem to be adopting the same tools as Beijing, it really undermines that argument.

SHAPIRO: You know, we mentioned TikTok and Huawei. Another example is Grindr. The Chinese owner was forced to sell that dating app earlier this year after the U.S. raised national security concerns. Given all these examples, do you think any Chinese tech company will be able to thrive and dominate in the U.S. market?

SEGAL: I think it's going to be very hard. I think any Chinese company that touches large parts of U.S. citizens' data is going to find it very hard going. And then certainly, tech companies and sectors that appear important to national security, like 5G or AI, are going to face similar restrictions.

SHAPIRO: And is that going to be true no matter who's in the White House?

SEGAL: I think it's very unlikely that the Biden administration will take a much more accommodating attitude towards China in the tech sphere. I think it's also going to compete very hard.

SHAPIRO: You know, tech journalist Kara Swisher recently tweeted that the U.S. focus on TikTok is misplaced. She wrote that the Chinese, quote, "are laughing at us for focusing on a social video service while they land-grab in tech worldwide." And she said it is a big issue made small by pretending it's about TikTok. Do you think she's right?

SEGAL: Well, I think in an earlier piece she also said that, you know, she didn't have TikTok on her own phone. She had it on her burner phone. So I do think there are...

SHAPIRO: (Laughter).

SEGAL: I think there are some national security implications. I think they are pretty minor with TikTok. I think she's right about that. And you know, the problem with focusing on TikTok is that we're not spending enough time talking about what we knew to - what we need to do to get technology and the United States right. What do we need to do to make sure that the U.S. is the most innovative economy moving forward?

SHAPIRO: So do you think that countering Chinese dominance online ought to be a U.S. goal? And if so, how should any administration approach that?

SEGAL: I think it is a goal. I think the goal needs to be framed as something more than just reaction and just blocking Chinese tech. So that means both, as I mentioned before, kind of focusing on U.S. innovation at home but also working with Europe, Australia, Japan, others, India, who may have a similar view about how the Internet should be regulated, how we can protect privacy, individual rights so we can have a strong model of Internet governance that contrasts with the Chinese model.

SHAPIRO: That's Adam Segal of the Council on Foreign Relations.

Thank you for talking with us today.

SEGAL: My pleasure.

(SOUNDBITE OF CHROMATICS SONG, "HANDS IN THE DARK") Transcript provided by NPR, Copyright NPR.

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