NS TechCrunch Global Affairs Project Examine the increasingly intertwined relationships between the technology sector and global politics.
This is the first of two articles comparing the impact of US and Chinese technology crackdowns. This work by special series editor Scott Bade considers the geopolitical consequences of each country’s approach. Tomorrow, Nathan Picardic and Emily de la Bruyère will explore how China’s “tech crash” is being driven by domestic politics.
It’s not a good time to be a tech giant. In China, high-flying tech companies were once one of the few companies that could operate relatively independently. Technology leaders such as Alibaba’s Jack Ma and Didi’s Jean Liu have become Davos’ flagship and global symbol of innovation in China. more than this.
Last year, after Ma delivered a speech criticizing Chinese regulators, his company’s record IPO was suspended and he was virtually “disappeared” for several months. Since then, Tencent has been fined numerous for antitrust violations. Since last year, the two companies have lost about 20% of their respective value, totaling more than $ 300 billion. Meanwhile, Diddy’s stock fell 40% after being ordered from the country’s app store. Recently, Chinese regulators have imposed new restrictions on edtech and games, banning cryptocurrencies altogether.
American tech tycoons may have freedom, but they and their business are also under government scrutiny. Leaders of antitrust law, such as Lina Khan, Tim Wu, and Jonathan Kanter, all hold senior positions in the Biden administration. Meanwhile, Congress is considering new legislation that regulates technology on issues ranging from privacy to age limits.
In both Beijing and Washington (not to mention Brussels, which has fought tech giants for years), the consensus is becoming more and more clear: Big Tech has become so powerful and unexplainable. As a politician who transcends the division of global idealism, the government now believes that it must exercise some control in the name of public goods. Political risks are higher than ever for founders, executives and investors.
However, while the crackdowns on both sides look similar on the surface, the implications of the antitrust strategies of both countries can no longer be different. In China, antitrust enforcement is being exercised as the sharp end of the ruling Communist Party stick. However, the goals of the US antitrust movement are not uniform.
Yes, China is taking decisive action in the early days of the United States. However, the Chinese government wants to limit data privacy and children’s spending time, which is a fig leaf to the true agenda of full political and economic control. In a country without virtually independent civil society, the tech sector was one of the few places where power emerged outside the ruling Communist Party. Xi Jinping’s more oppressive government does not accept such an independent source of power (see Hong Kong). The message is clear: draw the line of the party or face the power of the Chinese state.
Even better, it projects the power of China.China has long aimed to control next-generation technologies and is proactive Set criteria As part of the Chinese Standards 2035 project, we support many important industries and sectors, from 5G and AI to renewable energy and advanced manufacturing. An important part of this strategy was to quietly control international standards-setting bodies, but Beijing recognizes that controlling the companies that develop these technologies is just as important. Huawei, Xiaomi and TikTok may not actively spy on Western people, as many Western politicians fear, but the more their use spreads, the more Chinese standards become the global default. Will be.
Therefore, contrast the fate of Jack Ma with the fate of the founding family of Huawei, the 5G leader in China. Ma may be a member of the Communist Party, but Huawei’s success in making Chinese technology the default 5G kit in many parts of the world has made Chinese technology unreliable. Of course, Huawei has traded because it is close to Beijing. Huawei’s choice has become synonymous with voting for confidence in China, Endure NS risk.. Meng Wanzhou, the daughter of the company’s founder, was arrested in Canada on charges of accusing Huawei of violating US sanctions against Iran because of concerns about its relationship with China’s security services.
But loyalty is not unrewarded. Beijing arrested two Canadians and took advantage of their detention to sign an arrangement for Meng’s release. If Huawei hadn’t been seen in Beijing before, it’s certainly now. Lessons for other tech mogul in China? The party takes care of itself.
China’s crackdown has chilled investment, wasted talent, and probably killed the entrepreneurial spirit that built its formidable tech sector. However, it has clearly succeeded in heeling the tech giant to serve Chinese power.
If Beijing is disciplining its tech giant to serve its national interest, what exactly is the United States rebuking itself to do? Trustbusters in the United States may be concerned about overcapacity, but they rarely have a strategic vision of what a more competitive sector will look like. American tech giants have occasionally argued (incredibly) that their size is essential to American competitiveness, but neither they nor the government consider them agents of American power. Hmm. Indeed, it will be difficult to determine whether Congress considers the tech giant or China to be the greater enemy.
NS Want Many antitrust proponents are intensifying competition by dismantling, or at least regulating, things like Google and Apple, which in turn benefits the politics of the body and the US technology sector more broadly. right. Separating AWS from Amazon and Instagram from Facebook may benefit consumers, but will it help the United States maintain its technological advantage? It’s completely unclear.
To date, America’s let go of the capitalist system (open, flat, democracy) has created the greatest innovators in the history of the world.Benefiting from government-sponsored research, the industry is successful apart from Not for that, but its government association.And that’s a good thing — US companies are (almost) trusted around the world. because They are known to adhere to the rule of law, not the transition of which government is in power.
The US-China technology competition promises to fundamentally test this premise. Can a decentralized, non-cooperative industry that operates independently of the government maintain its advantage over the industry marshalled by superpowers?
I will remain Optimistic That American (and allied) innovation will succeed where it always has. Openness creates ingenuity. Our research and startups are second to none. And proper focus on competition suggests a boom.
But that doesn’t mean, at least, that there is no room for limited national strategy. I’m not saying that the United States needs an industrial policy like China.After all, China’s top-down models have created something spectacular waste It may work Weigh Its economy for decades. And the dull “break them” idea can be more harmful than good.
Instead, US lawmakers are approaching Europe’s view of antitrust law and need to work across the Atlantic to develop a wise framework for global competition standards. The new EU Trade Technology Council and the Quad Technology Working Group can lay the foundation for creating genuine democratic technology blocks that promote cooperation and maintain fair play.
This middle ground — providing government support without directing commercial outcomes — is prioritized (see The Origins of the Cold War in Silicon Valley). It’s also best to provide guardrails to the American technology industry without compromising entrepreneurship.
As Congress and the administration are now thinking about how to deal with technology competition, it should be kept in mind that it not only corrects the current harm, but also envisions the future of American technology itself. It is none other than American economic leadership.
China and US tech crackdowns set the stage for the next phase of competition – TechCrunch Source link China and US tech crackdowns set the stage for the next phase of competition – TechCrunch
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