China moves to sanction American entities after US bans TikTok, WeChat
China on Saturday launched a mechanism that could let it sanction foreign companies, upping the ante in a tech war with america a day after Washington moved to curb popular Chinese software TikTok and WeChat.
China’s long-expected “unreliable entities list” sometimes appears as a weapon for Beijing to retaliate against the United States, which has used its “entity list” to shut Chinese telecom giant Huawei out of the US market, while also moving against TikTok and WeChat.
Its implementation comes just a day following the US Commerce Department stepped up the pressure by ordering a ban on downloads of video software TikTok and effectively blocking make use of WeChat, the Chinese super-app.
An announcement by China’s Ministry of Commerce didn't mention any specific foreign entities that may be targeted.
But it said the new system would consider sanctions on entities whose activities “harm China’s national sovereignty, security, and development interests” or violate “internationally accepted monetary and trade rules”.
That language closely tracks wording that Beijing has used to repeatedly denounce US actions against Chinese companies.
Punitive measures can include fines against the foreign entity, banning it from conducting trade and investment in China, and restrictions on the entry of personnel or equipment into the country.
It covers “foreign enterprises, other organisations and people”, the ministry said.
‘Unreliable’
Under Friday’s US order against the Chinese apps, Tencent-owned WeChat would lose functionality in the United States from Sunday. TikTok users will be banned from installing updates but can keep accessing the service through November 12.
That timeframe potentially permits a tie-up between TikTok, owned by China’s ByteDance, and a US company to safeguard data for the wildly popular application to allay Washington’s security concerns.
With President Donald Trump facing a hardcore re-election campaign, US officials have described the measures as necessary to safeguard national security from potential Chinese espionage through the platforms.
But in a reply to the US steps, China’s Commerce Ministry on Saturday condemned what it called US “bullying”, saying it violated international trade norms and that there was no proof any security threat.
“If the united states insists on going its own way, China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies,” it said, without specifying the potential measures.
A short time from then on statement, the ministry announced the new sanctions regime.
TikTok vowed to fight the Trump crackdown in court, saying it impedes an instrument “for entertainment, self-expression and connection.”
Critics said that while the security risks were unclear, the sweeping ban raises concerns about the US government’s capability to regulate free expression.
“It’s a mistake to think of this as (only) a sanction on TikTok and WeChat. It’s a significant restriction on the First Amendment rights of US citizens and residents,” said Jameel Jaffer, director of the Knight First Amendment Institute at Columbia University.
Some analysts say Trump’s moves are motivated more by known reasons for business competition than security concerns.
The moves would effectively disable US usage of WeChat-a so-called super-app used for messaging, shopping, payments and other services-and TikTok from the web marketplaces operated by Apple and Google.
After Sunday, services on WeChat will be “degraded”, said a senior US Commerce Department official, who added that existing users may retain some capability.
WeChat is trusted among Chinese expats to keep in touch with people back. A court challenge to the ban by US-based WeChat users is pending.
The US ban on WeChat will not affect its service in China where in fact the app is much more widely used.
Pressure grows for a deal
Existing TikTok users should be able to continue using the software until November 12 - when it would also face a full ban on its US businesses if no deal is reached, according to officials.
TikTok’s brand of brief, quirky phone videos is becoming hugely popular, especially among teenagers, with 100 million users in the US alone.
The move ramps up pressure on ByteDance to conclude a deal to market all or part of TikTok to allay US security concerns.
A potential deal allows Silicon Valley giant Oracle to be the tech partner for TikTok, but some US lawmakers have objected to allowing ByteDance to keep a stake.
Trump said Friday a deal can happen quickly.
“For ByteDance, their back is against the wall to simply accept the conditions of the deals outlined in the last couple of days,” Daniel Ives at Wedbush Securities said in a research note.
“We still believe a deal can be reached and this shutdown averted although it’s a crucial 48 hours ahead for deal negotiations between all parties involved.”
