Today, the White House issued two executive orders to block two Chinese Internet companies. These two "national security reasons" of the administrative ban, behind the U.S. government pressure on Chinese enterprises to upgrade layer by layer, and the ultimate goal is to suppress the internationalization of Chinese Internet companies.
Reuse of emergency
The first prohibition is against byte hopping, and after 45 days American companies and individuals are prohibited from making any transactions with byte hopping. The second ban is against Tencent WeChat, which prohibits U.S. companies and individuals from engaging in any transactions related to Tencent's WeChat business 45 days later. Both bans are no surprise, but boots eventually landed, as u.s. secretary of state pompio has long announced that he will ban TikTok and wechat on the grounds that chinese companies may collect u.s. user data and threaten u.s. national security.
Both closures were carried out through the president's declaration of a state of emergency. After 9 / 11, the U.S. Congress passed the Patriot Act, which gave the president great executive power to take emergency measures against the assets of foreign enterprises in the United States without providing evidence. As long as the president felt that there was a threat, he could take decisive action.
American netizens commented ironically on twitter that nearly 160000 people in the United States have died in the new crown epidemic, and the president has not declared a state of emergency. However, in order to suppress two Chinese Internet companies, a "state of emergency" has been launched. Byte jump and Tencent enjoy the treatment of Huawei before.
Pressure levels are rising
This is actually the ban trump claimed to issue last Saturday. On a plane from Florida to Washington on Friday, trump said he would issue a state of emergency order on Saturday to completely ban tiktok and prevent U.S. companies from acquiring tiktok. He also stressed that he had every right to do so. But the next day trump went to the golf course and didn't issue a ban.
Of course, it's not that he changes his mind or forgets to play. It's just a means of pressure. Byte and Microsoft suspended the sale negotiations after the president made it clear that tiktok would be banned. Trump announced approval of the deal on Monday after Microsoft CEO Nadra personally spoke Mandarin to Mr. trump on Sunday. Only the parties concerned know exactly what they have discussed.
However, the terms of the negotiation between byte and Microsoft have changed: byte must sell all the equity of tiktok in the United States, and can not retain any equity. The U.S. investors of byte can retain a minority stake of tiktok in the United States; Microsoft, in addition to tiktok's U.S. business, also wants to acquire businesses in Canada, Australia and New Zealand; Microsoft must pay a large amount of benefit fee to the U.S. Treasury Department.
Trump said on Monday that there would be no deal without the U.S. government, so a key money must be given. Microsoft's statement is intriguing: it was after the White House forced tiktok to sell that Microsoft approached byte. The implication is that Microsoft is only a bid recipient, not a hijacker.
But what's more shocking is that trump said on Monday that he thought it was too troublesome to sell only 30% and suggested that Microsoft should swallow up the whole global business of tiktok. Just today, the financial times released news that Microsoft felt that it could not independently acquire the four market businesses of tiktok and could not be separated from the services in other markets around the world. It planned to acquire the global business of tiktok in an all-round way.
Today's administrative injunction also reveals the real intention. If the United States wants to force byte beat to sell tiktok's U.S. business, it can directly use CFIUS pressure from CFIUS, because this is the jurisdiction of CFIUS. To avoid greater business losses, byte eventually agreed to sell tiktok's US business. But now the U.S. government is threatening to block bytes with an executive order, apparently with the intention of swallowing tiktok's global business.
This has touched the bottom line of fair competition in the global economy. In the past few years, byte-hopping international operations, with huge resources, can not be ceded to American companies under the pressure of the US government.
byte declared public protest
The byte jump then issued a tough statement protesting against the U.S. president. "We are shocked that the new executive order issued by the President of the United States did not follow due process of law.... The United States Government ignored the facts, did not follow due process of law, decided on the terms of the resolution without authorization, and even tried to interfere in consultations between private enterprises.... If the U.S. government fails to give us justice, we will go to U.S. courts ."
Forced to sell tiktok's U.S. business because the U.S. government has direct jurisdiction, it is really helpless. But tiktok also has hundreds of millions of users in Latin America, the Middle East, Asia and Europe. The U.S. government has no jurisdiction, let alone force byte skipping to sell. Byte skipping has every reasonable reason to resist this unreasonable request of the US government.
At the end of last year, the U.S. government asked the Commission on foreign investment (CFIUS) to launch an investigation into tiktok. Byte skipping has been actively cooperating with the investigation and published the audit policy and algorithm source code, hoping to prove that tiktok has not abused the user data of the United States and will not provide user data to the Chinese government.
Byte efforts may be futile, because the ultimate goal of the US government investigation is to force TikTok to sell. A few months ago, bytes of American institutional investors urged Zhang Yiming to sell TikTok majority stake in the United States. After all, controlling shareholders have no loss to American investors, who are more worried about TikTok being blocked, affecting their return on investment. But Zhang Yiming refused to let go TikTok American control, has been deadlocked.
Until July, when CFIUS threatened to kill, all the pressure fell and accelerated, Zhang Yiming finally chose to sell a majority stake, but wanted to retain a minority stake TikTok the United States. At the time, U.S. Treasury Secretary Nuchin (CFIUS chairman) thought it acceptable. Byte agreed to sell TikTok U.S. business, first with a consortium of U.S. funds, and then Microsoft came to negotiate. TikTok's chief legal adviser has worked at Microsoft for 25 years and is a longtime friend of Microsoft's president.
When the three parties agreed on the plan, the president talks to block it completely TikTok, to pressure bytes to give up all of TikTok U.S. equity, and not only the U.S. business, but also Australia, New Zealand and Canada. Byte and Microsoft are still under negotiation, and Trump has publicly advised Microsoft to swallow TikTok global business directly, which is clearly unacceptable.
What does the United States want Tencent?
The same logic applies to the second ban, after nearly a month of news that the United States could block WeChat. But the ban itself does not directly block WeChat, but all WeChat-related transactions. The White House ordered the Commerce Department to specify which transactions to block, meaning that the power of interpretation is vested in the U.S. government.
As long as 45 days' decision-making time of the ban, the situation is likely to change a lot. According to the current style of the U.S. government, it is really not clear what the specific situation will be. Will the United States completely ban wechat, such as GoogleAppleIt is hard to say that stores take WeChat off the shelves or force WeChat to give up its American business.
What does the white house really want? Do you want wechat to exit the U.S. market? It's like layers of pressure on bytes to jump, and I think it's not just that. Unlike tiktok, which has tens of millions of monthly live users in the United States, wechat is actually limited to the Chinese American market in the United States, which does not affect the data security of mainstream American netizens at all. The White House's ban on wechat is more like a means of pressure, just like the federal government's continuous pressure on byte.
What is Tencent interested in in the United States? Obviously, it is not Tencent's own wechat for Chinese American social networking, but Tencent's huge portfolio covering the world, especially its investment assets in the United States. At the beginning of this year, Liu Zhiping, President of Tencent, introduced that Tencent has invested in more than 800 enterprises, of which more than 70 have been listed and more than 160 have become unicorns. Six companies have created an investment return of 5 billion US dollars, and one company has created an investment return of more than 10 billion US dollars.
In the U.S. market alone, Tencent has invested in more than a dozen companies, including Tesla, snapchat, Activitv blizzard, and Glu mobile, forming an investment matrix in the United States. These very attractive assets may be the ultimate goal of the United States, they do not want to see Tencent so deeply involved in the U.S. Internet and game industry. In fact, I am more worried about Tencent's abandonment of wechat in the U.S. market in order to preserve its investment assets, as happened in the Indian market.
an account of happenings after the event being told
With the continuous upgrading of the U.S. government's crackdown on byte hopping, the demands put forward are becoming more and more excessive, and byte's position has changed from rational retreat to open resistance. Regardless of the outcome of the fight, byte's attitude has been very clear: global business and US business are two different things, and we will never give up tiktok's global business easily. In the past two years, the U.S. government has used "state of emergency" three times to block Chinese science and technology enterprises and constantly increase the pressure of sanctions. This shows the success of the internationalization path of these three Chinese science and technology enterprises.
Sina Technology Zheng Jun US Silicon Valley