Asia

US, Apple may lose in President Trump's TikTok war, warn expert and survey

NEW YORK/BEIJING (XINHUA) – As the Trump administration is threatening to ban popular apps including TikTok and WeChat, “the United States may lose in Trump’s TikTok war”, warned an expert.

Dr Wei Shangjin, professor of finance and economics at Columbia University’s Graduate School of Business and School of International and Public Affairs, said that forcing TikTok to be sold cheaply to a “very American” buyer will endanger many US firms in the Chinese market, according to an opinion published by Project Syndicate last Thursday (Aug 6).

“If China were to mimic Trump’s gambit – alleging, without providing evidence, that some US multinationals are potential national-security threats – it could force them to sell their operations to ‘very Chinese’ buyers. Although the Chinese government has not yet done so, the risk has become higher now,” said Dr Wei, who served as chief economist of Asian Development Bank during 2014-2016.

US President Donald Trump last Thursday issued an executive order banning any US transactions with Chinese tech firm ByteDance, owner of TikTok, starting in 45 days.

TikTok has been downloaded more than 175 million times in the United States and over a billion times globally, according to the executive order, which claims that the app automatically captures “vast swaths of information” from its users, posing risks to US national security.

A similar executive order has also been issued for WeChat, a messaging and social media app owned by Chinese tech giant Tencent.

Although Mr Trump’s actions could yield a short-term gain for the US, they have introduced severe potential risks to US interests, not to mention international and domestic rules of commerce, Dr Wei said.

“After all, what would happen to business confidence if governments assumed that they could extort private enterprises at will?” Dr Wei added.

Mr Trump is essentially doing what the US has long accused China of doing: disrespecting private property, presuming guilt without evidence, eroding foreign firms’ legitimate rights without compensation, and using arbitrary, opaque rules to block them from operating in the country, according to Dr Wei.

“There is still time for the Trump administration to change course and avoid damaging US interests. But the clock is running – tick tock,” Dr Wei said.

Meanwhile, a Global Times report said on Sunday that Mr Trump’s attack on WeChat might cause US tech giant Apple to lose the vast majority of its Chinese users, who help to generate up to 20 per cent of the company’s global sales.

The nationalist tabloid quoted a survey launched last Friday by online business platform Xueqiu which asked the general public to choose between Apple and WeChat – if WeChat was banned from the Apple Store.

More than 850,000 people have participated in the survey so far and 800,900 of them said they would switch to an Android phone if they could not use WeChat on Apple’s IOS.

Industry observers said that if that happened, most high-end users of Apple would likely switch to its Chinese rival Huawei, Global Times reported.

WeChat is essential for many Chinese users, as it is also a business and payment tool for almost every Chinese mobile user, besides being a messaging app.

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