The tension between China and the United States of America (USA), one of the leading actors in global politics, continues unabated, and the parties are pushing each other’s red lines more and more each day. While this situation makes itself felt especially in the Asia-Pacific Region; Possible conflict scenarios along political fault lines are becoming the usual agenda items of the media. In addition, economic competition and the commercial problems it brings produce a different dimension to the struggle between the parties.
These problems, especially arising from companies and their activities, are interpreted by some experts as traces of the USA’s efforts to restrict Chinese companies and strengthen the hand of US companies in the field of trade. On the other hand, some academics and experts draw attention to the fact that the companies that are mentioned can be a threat to data. The most obvious example of this situation is the social media platform called “Tik Tok”, which has been on the agenda for a while with allegations of espionage. In fact, the targeting of Tik Tok by the Washington administration is not a new development; The historical background of this issue goes back to the period of the previous US President Donald Trump.
It is clear that the US-China rivalry, which officially started in 2018, has had its effects not only in the military and political field; in many areas, including technology. After the Chinese-origin technology company named Huawei was sanctioned by the USA and Tik Tok, also of Chinese origin, was also the target of bans. The Washington administration stated that the reason for the bans are Tik Tok handing over the information of US citizens to Beijing.[1]
As a matter of fact, recently, government employees have been banned from downloading Tik Tok to their work phones by Britain, Australia and the European Commission. It seen that national security concerns are justified in these bans. [2]As mentioned before, some experts argue that the underlying reason for the national security discourse is the global success of Tik Tok. In this context, it has been stated that the success of Tik Tok raises concerns in the USA economically, and the purchase of some shares of Tik Tok by US companies has been brought to the agenda by Washington as a solution since 2018. Otherwise, the USA says that Tik Tok will be completely banned in the country.
The statements from Tik Tok management stated that the company responded transparently to the security concerns; it is underlined that data activities are subject to third-party verification and monitoring processes.[3] In addition, Theo Bertram, one of the company’s top executives, stated that 60% of Tik Tok’s parent company, ByteDance, belongs to global investors, 20% to employees, and the remaining 20% to the founders of the company, stating that the company is not a Chinese company.[4]
Since the area of conflict in question is a company that is a trade tool, it is crucial to examine the download rates and commercial values of the company in the USA in order to better understand the subject and add a different perspective. The company has been downloaded 165 million times in the USA alone during the 2020, for Tik Tok.[5] Looking at the global data, it was downloaded 850 million times during 2020[6]. Instagram, the popular US-based social media platform, was downloaded 503 million times worldwide in 2020[7]. In addition, in 2020 and 2021, Tik Tok has managed to become the most downloaded application in the world[8].
Reaching $11.6 billion in revenue in 2022 in terms of commercial revenues, the company nearly tripled its revenue of $3.9 billion in the previous year[9]. In contrast, Instagram generated $43.2 billion in revenue in the same year; in 2021, it generated $42.1 billion in revenue[10]. Therefore, it can be said that although Tik Tok was founded in 2016, it quickly attracted attention, and this interest turned into income. This situation may have affected the view of Tik Tok by fueling the economic concerns of the USA, which has had a trade deficit due to the rise of China since the beginning of the 21st century.
Shou Zi Chew, CEO of the company, currently worth $65.7 billion[11], answered the questions of US lawmakers on March 23, 2023. Shou answered the questions that are focused on data security by stating that Tik Tok’s parent company, ByteDance, is not an agent of China or any other government. In addition, Shou added that the data is stored on servers belonging to the American company Oracle[12].
Also, on the same date China reacted directly to the forced sale of Tik Tok’s shares for the first time. It is an event whcih cannot be ignored that this reaction came while Shou was testifying in front of US lawmakers. In his statement on the subject, Chinese Ministry of Commerce Spokesperson Shu Jueting emphasized that any sales transaction must go through the legal processes of China, and underlined that the approval of the Beijing administration will be needed in a possible agreement[13].
As a result, the USA-China rivalry, which started in 2018, makes its impact felt in the digital world as well as in many areas. In particular, it can be foreseen that the complete ban of Tik Tok in the USA and the possibility of forced sales will increase the tension between the two countries, which are already experiencing serious problems.
[1] Kerry Brown, “How “TikTok Got Caught in the Crosshairs of US-China Politics”, King’s College London, www.kcl.ac.uk/how-tiktok-got-caught-in-the-crosshairs-of-us-china-politics, (Date of Accession: 05.04.2023).
[2] “Founder of TikTok Parent Company Lost $17 Billion in 2022: Ranking”, Arab News, arab.news/8he39, (Date of Accession: 07.04.2023).
[3] “The TikTok Wars-Why the US and China Are Feuding over the App”, The Guardian, www.theguardian.com/technology/2023/mar/16/the-tiktok-wars-why-the-us-and-china-are-feuding-over-the-app, (Date of Accession: 17.03.2023).
[4] Ibid.
[5] Brown, op.cit.
[6] Mansoor Iqbal, “TikTok Revenue and Usage Statistics (2023)”, Business of Apps, www.businessofapps.com/data/tik-tok-statistics/#:~:text=TikTok%20was%20the%20most%20downloaded,quarterly%20downloads%20outside%20of%20China., (Date of Accession: 09.04.2023).
[7] Ana Gajić, “How Many People Use Instagram”, 99Firms, 99firms.com/blog/how-many-people-use-instagram/#gref, (Date of Accession: 09.04.2023).
[8] Iqbal, op.cit.
[9] “Tiktok Ad Revenue (2019-2024)”, Oberlo, www.oberlo.com/statistics/tiktok-ad-revenue, (Date of Accession:09.04.2023).
[10] Sara Lebow, “Facebook Still Generates Most of Meta’s ad Revenues, as Instagram Drives Growth”, Insider Intelligence, www.insiderintelligence.com/content/facebook-still-generates-most-meta-ad-revenues-instagram-drives-growth, (Date of Accession: 09.04.2023).
[11] “Brand Value of TikTok/Douyin Worldwide from 2021 to 2023”, Statista, www.statista.com/statistics/1324424/tiktok-brand-value/, (Date of Accession:08.04.2023).
[12] Haleluya Hadero-Farnoush Amiri, “TikTok CEO Grilled by Skeptical Lawmakers on Safety, Content”, AP News, apnews.com/article/tiktok-ban-ceo-congressional-hearing-bytedance-china-44d948c5b0ba18e2a714e0fa62d52779, (Date of Accession: 24.03.2023).
[13] Laura He, “China Says it ‘Firmly Opposes’ A Potential Forced Sale of TikTok”, CNN Business, edition.cnn.com/2023/03/24/tech/china-opposes-tiktok-sale-approval-needed-intl-hnk/index.html#:~:text=China%20said%20it%20would%20“firmly,in%20its%20most%20important%20market, (Date of Accession: 24.03.2023).
