Butterfly Effect: The Real TikTok Challenge
WHY YOU SHOULD CARE
Unless the U.S. and its partners develop better versions of China's popular apps, bans won't help them challenge Beijing in technology.
In the 1970s, when the U.S. was desperate to develop stealth fighter jets, it turned to an unlikely source for inspiration. Defense firm Lockheed Martin looked at the work of Soviet physicist Pyotr Ufimtsev, a man now recognized as the father of stealth technology. Using the theories Ufimtsev had outlined in his research papers, it designed the F117 and B2 stealth bombers that played a vital role in giving the U.S. Air Force an edge in the final years of the Cold War.
Today, nearly half a century later, that episode holds fresh significance for America as it races for tech supremacy over China amid broader tensions to do with trade and the coronavirus pandemic. Increasingly at the center of that war is TikTok, the world’s fastest-growing social media platform. Best known for its sketches, impromptu songs and piano performances, dogs on skateboards and more, TikTok was banned by India, its largest market, last month following a border crisis with China. President Donald Trump has threatened to ban the app, owned by Chinese firm ByteDance, in the U.S. too. And on Monday, the House of Representatives voted to bar the use of the app on any government digital platforms.
But while these moves hurt TikTok’s growth, they also represent a critical test for the West and its partners like India. For the first time since the end of the Cold War, the U.S. is adopting — and pressing its allies to follow suit — a strategy traditionally employed by China: Ban the enemy’s tech products. With Huawei too, the U.S. has pressed European allies, Australia and India — largely with success — to keep the telecommunications giant out of their 5G networks. It’s a playbook China has previously used, in preventing most of its citizens from using Facebook, Twitter, YouTube, Google and other American social platforms.
It’s vital to understand what’s behind that Chinese strategy. For sure, its bans on western tech firms are in part about ensuring strict control over public messaging, and over the data of its citizens. It is telling these companies that they’ll need to bend to Beijing’s rules on data privacy if they want access to China’s gigantic market. But there is a second, more long-term thought process behind China’s approach — one where it has undeniably achieved its goal. It has used the absence of western competition in its domestic market to develop high quality tech alternatives that western apps are now playing catch-up with.
Consider WeChat. Its integration of e-commerce with social messaging is advanced beyond anything Facebook’s WhatsApp can offer. That’s one major reason why major luxury brands are shifting their test markets from the West to China. WeChat also needs less data to send and receive multimedia content, making it an attractive option in countries and regions where network connectivity is less reliable.
Similarly, a key factor behind TikTok’s meteoric rise in popularity is its algorithm, which automatically places fresh content among its most popular videos, before using machine learning to determine whether to promote it further, based on how it does initially. That’s in stark contrast to Instagram and YouTube, where newcomers languish on the margins until they organically do well. Their ease of use and sophistication are why TikTok, WeChat and other Chinese apps have grown rapidly beyond their home, before the recent government bans.
If they use restrictions on Chinese tech to develop products that are actually superior, the West and India would have learned the right lessons from Beijing. If they successfully use economic coercion to get Chinese apps and firms to agree to global norms on data privacy and transparency, then too the U.S. and its partners would have gained from following Beijing’s own approach.
Chinese firms are happy to pick up tips from their American counterparts. Under scrutiny, TikTok has now promised to create up to 10,000 jobs in the U.S., following the model of Google, which pledged $10 billion in investments earlier this year, as it faces antitrust investigations.
To be sure, it isn’t easy — or comfortable — to follow your rival’s example. But unless the U.S. and its partners use restrictions on Chinese products to actually build better alternatives, their tech challenge to China will be short-lived. The West and democracies like India shouldn’t need a reminder: In capitalist economies like theirs, the market eventually wins. Sometimes, your enemy can be your best teacher.