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China Hits Back at USA Over 'Smash and Grab' TikTok Strategy, AI Lawsuit Against Apple

By: Shouvik Das


Last Updated: August 04, 2020, 14:15 IST

The logo of the much-controversial TikTok app is seen on a smartphone, against the backdrop of the national flag of the United States of America. (Image: Reuters)

The logo of the much-controversial TikTok app is seen on a smartphone, against the backdrop of the national flag of the United States of America. (Image: Reuters)

The unofficial cold war between the two economic powers is now seeing China hit back at USA, accusing the Trump administration of trying to abuse its power, and American companies sidelining Chinese technologies.

Over the past week, reports emerged about Bytedance looking to sell its USA operations of viral social media app TikTok to an American company, with Microsoft emerging as frontrunners. The app, which rose to viral fame across the world, has faced considerable setbacks in recent times, with the service being banned in India following a government directive. While it is seemingly staring at a potential ban in USA as well, the Chinese government is taking an offensive approach to combat American strong-arming, as per a recent editorial published by Global Times, the English newspaper of China’s government-backed publication, People’s Daily.

'Submission or mortal combat'

The international mouthpiece of the Chinese government has accused USA of “theft”, describing the TikTok deal as an act of “bullying”. It went on to state that China will have “plenty of ways to respond”, should it see the US government force its hand in what it has described as a “smash and grab” strategy to manipulate a Chinese company operating in America. The narrative also appears to have ruffled sentiments in China, with Bytedance founder-CEO Zhang Yiming facing public backlash for being “too accommodating and yielding” to America’s demands.

The TikTok-USA saga, and the recent Global Times editorial in particular, signifies what may become the start of the Chinese government hitting back at international pressures. The Chinese government has stated that USA is using its technological superiority and its relations with its allies to create an unfavourable and biased environment of business for Chinese companies. However, while it cries foul over the Trump administration’s tactics, word from China indicate a direct response to USA’s threats. A Reuters report said that the China government has accused USA of creating an atmosphere, where the only two options left were “submission or mortal combat in the tech realm”. It isn’t a threat, but a subliminal warning for sure.

A billion-dollar lawsuit

China’s recent trend of hitting back at USA further continued with Shanghai Zhizhen Intelligent Network Technology Company, commonly known as Xiao-i. The latter has filed yet another lawsuit against Apple, one of the biggest American (and global) companies, accusing it of stealing bits from its patents on voice recognition technologies and using them with Apple’s digital assistant, Siri.

The move coincides with China’s continued conflict with USA, where Huawei – arguably one of China’s biggest electronics companies – is already blacklisted, and Bytedance is close to selling off its operations to a US firm. Even though Apple’s statement expressing “disappointment” at a lawsuit filed by Xiao-i “again” suggests that it is fairly confident of defending itself in court, the $1.4 billion patent infringement claim suggests China is attempting to make inroads into US technology dominance, and prove that it is not going to take things quietly.

No longer dependent

Also important to note here is a recent report by market research firm Canalys, which suggested that for the first time ever, Huawei’s disclosed shipment numbers were higher than that of Samsung’s. According to the report, Samsung saw a 30 percent global shipment decline due to the Covid-19 pandemic to clock 53.7 million units shipped in the latest quarter. Huawei, meanwhile, exhibited only a 5 percent drop to clock 55.8 million units shipped in the same quarter. What’s important to note here is the distribution of nations for units shipped – while Samsung is a uniform, global player, over 70 percent of Huawei’s shipments come from China only.

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    While this means that Huawei will likely drop back in ranking once the pandemic normalises, it also goes on to show China’s might in the global technology industry – in turn hitting back at USA that even after being banned from conducting business with US companies, China is threatening to emerge as a potential global strength that can be large enough without bowing down to the dominant market players.

    Even as US president Donald Trump makes a perplexing demand that the US government treasury should receive “a very substantial portion” of whatever price Microsoft pays to acquire TikTok’s USA business, China’s plans are different. It is on a trajectory to fight out the eyeballing episode, and state that it is no longer standing at a juncture where its businesses would fall if US or global coordination does not come through.

    first published:August 04, 2020, 14:15 IST
    last updated:August 04, 2020, 14:15 IST