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Home / World / The US is increasing pressure on Chinese technology giants like Huawei and ByteDance

The US is increasing pressure on Chinese technology giants like Huawei and ByteDance



The logo of the social media app TikTok (also known as Douyin) will be displayed on December 14, 2018 in Berlin on a smartphone.

Thomas Trutschel | Photo Library | Getty Images

The US is putting pressure on Chinese technology companies, and this could be a long-term strategy that will continue – even if a trade agreement is reached, an expert told CNBC.

The popular Chinese app TikTok is the latest company in Washington's crosshair.

A US regulatory committee ̵

1; the Foreign Investment Committee in the US (CFIUS) – appealed to the parent company of the app, Bytedance, for concerns that the 2017 acquisition of the social media app Musical.ly may be over National company could be security risk, said a person familiar with the situation to CNBC.

The Trump government's focus on Chinese technology giants is based on national security concerns and concerns about the competitive threat facing American companies, experts told CNBC. They said it could potentially be used as a lever in trade negotiations – but even if a trade agreement is reached, Chinese technology companies will be unaware.

Earlier this year, telecommunications supplier Huawei was blacklisted This restricts the Chinese company's access to US technology. According to Washington, Huawei poses a national security risk because its network equipment could be used by Beijing for espionage purposes.

The Trump administration has attempted to persuade other governments to exclude Huawei from next-generation mobile networks, known as 5G. Huawei repeatedly denied the allegations of the United States.

According to a Monday's Financial Times report, Washington urges Taiwan's government to block Taiwan Semiconductor Manufacturing Company (TSMC) from selling chips to Huawei.

A TSMC spokesman told CNBC that the company had received no request from the US or Taiwanese government to stop shipping chips to Huawei.

Last month, Washington added a number of Chinese surveillance companies to its blacklist, including Hikvision, one of the world's largest technology companies.

Leverage of the trade war?

The trade war between the US and China continues, and technology has become an important part of it. Issues such as intellectual property are being discussed in ongoing negotiations. Experts see Trump's willingness to get to the bottom of market leaders such as Huawei, a way to slow down the progress of Chinese technology worldwide.

Some also suggested that Huawei could be used as a bargaining chip to reach a favorable trade agreement. The recent pressure on US technology could be an extension of it.

"It has announced these steps in the context of a trade war in which President Trump has shown his willingness to use unconventional measures as a lever against the Chinese," said Dan Wang, technology analyst at macroeconomic research firm Gavekal, told CNBC: [19659002] China and the US are seeking to sign a "Phase 1" trade agreement. But steps against Chinese technology could be part of a longer-term game, even if the trade war finally ends.

"Concern for Chinese technology – from the point of view of national security, human rights and technology competition – will continue when and when A trade agreement is concluded," said Adam Segal, chairman of Ira A. Lipman for emerging technologies and national Security at the Council on Foreign Relations to CNBC. "The escalation seems to be part of a long-term tightening of China's pressure on technology."

China's competitive threat

Experts told CNBC that the competitive threat Chinese companies face for American companies could also be a reason for Washington's recent pressure increased pressure.

"The US Government is concerned about the possibility of being overtaken by China in key areas of technology, and the Huawei / 5G problem may be considered as a Sputnik Latter-day moment – the day of the Die US finds they have dropped the ball, "said Nigel Inkster, a senior adviser to the International Institute for Strategic Studies, to CNBC.

"Sputnik Moment" refers to when the Soviet Union defeated the US at the launch of the first artificial orbit of spacecraft into space. In terms of 5G technology, there is no American competitor for Huawei.

Meanwhile, the social media app TikTok has been criticized, including allegations that it censors Beijing's classified content, as well as concerns about the processing of user data.

] But Washington's investigation of the company could also aim to protect some social media companies in the US, such as Facebook and Snap, from the competition that TikTok represents, analysts say.

"Some may argue that this may be due to China Neil Campling, director of technology, media and telecommunications research at Mirabaud Securities, told CNBC why CFIUS could now consider the app.

Campling also became highlighted that Huawei is the world's leading provider of telecommunications equipment and Hikvision is the leader in surveillance technology, and TikTok has "record-breaking app downloads."

"The first two are subject to US trade restrictions – and now ByteDance is the subject of a CFIUS Verification. Coincidence? "Campling said.

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