TikTok and China
Discussions about technology regions tend to split the global market into China (where Chinese companies dominate) and the rest of the world (where US companies dominate). Commentators in Europe and the United States often appear to forget about Chinese tech giants altogether. But China’s tech firms have not only a stranglehold on the Chinese market but also the capability to disrupt software markets outside China; the success of ByteDance’s (Beijing, China) TikTok video-sharing social-networking service is evidence of this capability.
In his recent blog post about the success of TikTok, tech and entertainment expert Eugene Wei highlights TikTok’s simplicity and highly effective algorithm. Wei claims that in comparison with other services and platforms in the video-sharing space, TikTok has fewer functions and is more reliant on its algorithm to serve users with content. He also points out that TikTok’s algorithm is substantially more sophisticated and better performing than are those in use by other video-sharing services and platforms. In addition to achieving success, TikTok has raised national-security concerns. At the time of this writing, the government of China, ByteDance, and the administration of US President Donald Trump continue to battle over whether the US government will permit ByteDance to operate TikTok in the United States. The most likely outcome appears to be one that will largely protect ByteDance’s interests: ByteDance’s owning the majority of the newly formed TikTok Global, with Oracle Corporation’s (Redwood City, California) and Walmart’s (Bentonville, Arkansas) taking minority stakes.
Even when Chinese tech firms focus mostly on the Chinese market, they have significant influence on the global market. For example, because access to the WeChat (Tencent Holdings; Shenzhen, China) app is more important than is the phone itself for many Chinese citizens, Apple (Cupertino, California) analyst Ming-Chi Kuo predicted that shipments of Apple’s iPhone in China could drop by 25% to 30% if Apple has to remove WeChat from its App Store.
The relationship between the government of China and the country’s software firms is clearly a complicating factor for all organizations that have a stake in the global software market. Notably, the Chinese government itself is building a significant software ecosystem. For example, the People’s Bank of China (Beijing, China) looks set to become the first major central bank to issue a purely digital currency: the digital yuan.
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