China Brief

Is This the Beginning of the End for Western Tech in China?

Western firms say they won’t comply with the new national security law in Hong Kong.

Protesters chant slogans and gesture during a rally against China's new national security law in Hong Kong on July 1, 2020.
Protesters chant slogans and gesture during a rally against China's new national security law in Hong Kong on July 1, 2020. ANTHONY WALLACE/AFP via Getty Images

Welcome to Foreign Policy’s China Brief. The highlights this week: What the national security law in Hong Kong could mean for U.S. tech firms in China, how foreign student visa restrictions in the United States are a gift to China, and a critical Chinese scholar is arrested.

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For Tech Firms, Hong Kong May Be the Last Straw

The ramifications of China’s draconian national security law in Hong Kong are growing, both within the city and beyond. Libraries are pulling pro-democracy books from the shelves, lawyers have issued a strong but likely futile letter of protest, political songs are banned at schools, and the police have sweeping new powers. And in the United States, the Senate has passed new legislation targeting Chinese officials and banks for their role in repression in Hong Kong.

One of the hottest battlefields is technology. U.S. companies that were once happy to comply with the Chinese authorities on the mainland or that desperately sought President Xi Jinping’s favor have apparently realized, following China’s hard swing into even deeper authoritarianism this year, that the reputational cost of giving in to Beijing—both among the public and with the U.S. government—outweighs the benefits of a Chinese market that can be snatched away at an authoritarian’s whim.

Over the last three days, numerous firms—including Zoom, which faced recent criticism over its cooperation with Beijing—have rushed to state they will not comply with requests under the national security law. (They’ve said little about requests under mainland Chinese law itself, however.) That’s in part because the law targets speech globally, not just in the city itself. U.S. Secretary of State Mike Pompeo has praised firms for their actions, which is likely to provoke Beijing further.

Uncertain ground. Some analysts have argued that tech companies are uncertain because of the newness of the law: As on the mainland, over time they will find compromises and methods of lobbying that allow compliance without too much cost. But this ignores the increasing uncertainty of mainland politics, where active obeisance instead of passive compliance is now often demanded.

Beijing is very likely to see Hong Kong as a proxy for how willing tech firms are to go along with the whole of the Chinese order, and straddling the fence is no longer likely to be an option. Apple, which maintains a huge presence in China unlike Google or Facebook, faces the hardest choices. The Hong Kong decisions may be the breaking point for what once seemed to be a mutually profitable relationship between Western tech and the Chinese Communist Party.


What We’re Following

Foreign student debacle. The recent announcement by U.S. Immigration and Customs Enforcement that students whose universities only offer remote teaching in the fall will face expulsion from or be banned from admittance to the United States is a gift to China, which has long decried the brain drain of talent to the United States. Even if the rule is successfully challenged in court, the damage is already done: The money and talent of international students will flow in great volume elsewhere. The Trump’s administration’s racism has often focused in particular on Asian students, a target of white nationalists such as Stephen Miller and Steve Bannon. Meanwhile in Silicon Valley, anti-Asian racism—long a simmering source of resentment—appears to be finding more public expression.

Critic and scholar arrested. The scholar Xu Zhangrun, one of the few remaining open critics of Xi’s rule in the mainland, was arrested Monday on what appear to be trumped-up charges of soliciting prostitution. Twenty police officers and 10 vehicles were used to detain the 57-year-old academic, who has been under house arrest since earlier this year. Xu has been in the line of fire since condemning Xi’s abolition of presidential term limits in late 2017, a move that other intellectuals in China decried in private but remained silent on in public. The arrest reinforces the absolute intolerance for criticism under Xi.

Pullback on the Indian border. Chinese forces have withdrawn from the border area where a deadly skirmish with Indian troops erupted several weeks ago. But the cooling of tensions is unlikely to repair the long-term damage done by the Galwan clash, and Indian analysts fear that China will keep reinforcing the disputed border with troops, fortifications, and other infrastructure, as it did after the Doklam conflict in 2017. Meanwhile, China has widened its territorial conflict with Bhutan this week. It’s hard to tell if there’s a coherent national strategy here or if nationalistic posing is now seen as a powerful route to advancement by individual officials and generals.

Sea posturing. The U.S. deployment of two aircraft carriers to the South China Sea has considerably heated up already hot tensions with China. China’s decadeslong effort to make sweeping and illegal claims in the oceans that are disputed by almost all of its neighbors has stepped up in recent years. The state media response has been typically aggressive, prompting a sharp response from the U.S. Navy on social media.


Tech and Business

TikTok bans. In the wake of India’s ban on Chinese mobile apps—not yet fully implemented—the Trump administration has made noises about also banning the video app TikTok. Many have raised concerns about TikTok, but it’s unclear how such the ban would work. It would certainly produce a legal fight on multiple grounds, including free speech. TikTok maintains that its U.S. and Chinese operations are separate. The site has become a popular locus for young users posting anti-Trump and anti-conservative videos, muddling the waters further when it comes to the motivation behind government action.

Berlin looks east. Germany is hoping to strengthen its economic ties with China, setting itself apart from the rest of the West and the United States in particular. Germany’s relationship with China has always been divided. On one hand, human rights issues preoccupy the German public, and figures such as Ai Weiwei and Liao Yiwu are well known there. But on the other, trade between China and Germany is significant and largely responsible for Germany’s post-2008 prosperity. The antagonism shown by President Donald Trump and his team toward German Chancellor Angela Merkel has also poisoned any attempts by the United States to sell Berlin on a split with Beijing.

Global AI conference. On Thursday, the Global AI Conference kicks off in Shanghai. Despite its title, the forum will see almost entirely Chinese attendees thanks to travel bans and geopolitical tensions. Notably, the Chinese artificial intelligence firms present, such as SenseTime, will highlight their contributions to city management and new infrastructure construction—government projects that are flush with money and are seen as euphemisms for control, surveillance, and genocide in Xinjiang.


What We’re Reading

“Viral Alarm: When Fury Overcomes Fear,” by Xu Zhangrun, ChinaFile

In the wake of his arrest, I recommend returning to Xu Zhangrun’s essay that assaults Xi’s failures on the coronavirus, though never mentioning the president by name and using only a series of increasingly parodic titles.

“First and foremost, I would posit that the political life of the nation is in a state of collapse and that the ethical core of the system has been rendered hollow. The ultimate concern of China’s polity today and that of its highest leader is to preserve at all costs the privileged position of the Communist Party and to maintain ruthlessly its hold on power,” Xu writes, pointing to failures predating the pandemic: “A collapse in consumer confidence; widespread panic about the long-term security of private property; administrative and academic frustration and pent-up anger; a general shutting down of society as a whole; and, a depressed cultural and publishing industry.”


That’s it for this week.

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James Palmer is a deputy editor at Foreign Policy. Twitter: @BeijingPalmer

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