The Banning of WeChat and TikTok Is Unbearably Dangerous Politics

– September 23, 2020 Reading Time: 4 minutes

In 2013 Amazon founder Jeff Bezos purchased the Washington Post. Does anyone with a reasonable understanding of U.S. commerce, along with U.S. commerce’s historical relationship with the political class, think this purchase was coincidental?

Let’s be reasonable. While it’s possible newspapering has always fascinated him, the purchase had unstated, but obvious strategic benefits. In particular, owning the most powerful newspaper in a political town somewhat protects Bezos and his brilliant creation from those politicians.

No doubt Bezos would prefer to concentrate on growing Amazon, but he’s also wise. He remembers what happened to Bill Gates and Microsoft when the founder was slow to develop a “Washington” presence for his company. Politicians soon let him know what a failure to engage them would mean. The great company was nearly broken apart as a consequence.

All of this – and more – rates prominent mention as conservatives rationalize the Trump administration’s theft of TikTok, along with its ban of WeChat. Even the normally free market Wall Street Journal editorial page has puzzlingly described the mugging of TikTok as a possible “example of the market increasing business competition and solving a political problem at the same time.” No, political outcomes are just that.

The same editorial page tried to put a semi-happy face on the WeChat ban with its assertion that “Tencent founder and CEO Ma Huateng is a proud member of the National People’s Congress.” It seems the deference Huateng shows to China’s political elite justifies the protectionism and thievery in the U.S. But does it?

The argument from the right is that China is run by the Chinese Communist Party. And you can’t trust communists. They might spy on us, or something like that.

The justification when applied to TikTok is on its own absurd. Really, what would they surveil? The first yours truly heard of TikTok (it’s a fun visit with great videos) was when one of the sons of Victoria and David Beckham asked his mother if she would do a dance video with him for TikTok. He wanted more followers. The app is popular with young people, you see. But apparently the “communists” can force the handing over of search information?

Taking this further, the simple truth is that the Chinese are no longer “communist” in the collectivist, tragic sense. Though the communist party runs China, it’s no longer a communist country. It’s sad that something so basic must be said, but a country with 4,200 Starbucks (and counting), thousands of McDonald’s, and that is dense with symbols of U.S. capitalism given the love affair the Chinese people are conducting with all things American, isn’t a communist country. More realistically, the Chinese are overseen by a semi-authoritarian political class. Too bad. Imagine how much more productive they would be if a less authoritarian Party that’s not the CCP were running the country.

The main thing is that politicians in China are powerful. That they are logically explains why Huateng and others would try to make nice with those in power. Kind of like Bezos does. Get it?

We keep hearing about the role of government in Chinese businesses, and that this powerful role means government can dictate what Chinese businesses do to the detriment of U.S. “national security,” but such commentary ignores how what’s true in China is similarly – and sadly – true in the U.S. Think Bezos yet again. And more.

Have readers forgotten that when Citi C -0.6%group ran into trouble yet again in 2008 that there were no fewer than 60 full-time government regulators working within its headquarters? Does anyone presume that any other major U.S. bank is any different from Citi?

Investment banks have historically made sure to have in their executive suite prominent Democrats and Republicans in case the unheard of happens. Readers might keep this in mind as they nod their head in support of the WeChat ban given Huateng’s comment that “We are a great supporter of the government in terms of information security.” Executives here don’t mess with government, nor do they there.

Does anyone remember 2009, and President Obama essentially firing General Motors CEO Rick Wagoner? Does anyone remember the various mandates imposed on the automaker about environmentally-friendly cars? When government bails you out, it doesn’t just send money and walk away. It expects to collect on the funds disbursed. Does anyone think present CEO Mary Barra would speak ill of either President Trump or a future President Biden?

GM sells more cars in China than it does in North America. Cars are increasingly computers on wheels. Given GM’s tight relationship with the political class, and the presumed ease with which the carmaker could track Chinese buyers, should the CCP ban it in China?

Ideally all of this will be taken into account as conservatives rationalize the mugging of TikTok, and the banning of WeChat. Conservatives historically don’t support meddling in corporate matters, they normally wouldn’t stoop so low as to justify the latter with something along the lines of “the CCP is doing it,” plus they normally wouldn’t be so unreasonable. They wouldn’t because they’ve long decried the scenario businesses endure whereby they feel they must have many, many “men in Washington” making nice with politicians. Such is life, and it’s wrong. But let’s not blame Chinese CEOs for having to inhabit a political world that resembles the one here more than most would like to admit. Or, do conservatives want to forget the lockdowns that destroyed tens of millions of jobs, millions of businesses, and, well, you get it.

Ultimately what’s happening is irresponsible in addition to unreasonable. Let’s stop penalizing Chinese businesses for having the temerity to operate under less than ideal political conditions. They’re more like we are than most want to admit.

Reprinted from Forbes