Taiwan has become the latest country to move against Chinese tech companies. The democratic island is moving to ban iQiyi and Tencent from operating streaming video services on its soil.
A government notice published online Tuesday announced new rules of Taiwan’s National Communications Commission that prohibit Taiwanese individuals and companies from providing services to mainland Chinese streaming operators and distributing their content.
The notice said that Tencent video and iQiyi have been operating illegally in Taiwan by partnering with local broadcasters and distributors to provide their video content through streaming services.
CNN Business reported that the Commission’s decision is provisional pending a 14-day public comment period, while the rule will become effective September 3.
Taiwan has been unwittingly caught up in the US-China tech conflict, and has been bending to Washington. Taiwanese Semiconductor Manufacturing Company (TSMC), were among chipmakers prohibited by the United States from supplying chips to Chinese telecom giant Huawei.
Being a small island of 24 million people, Taiwan’s move to ban Tencent and iQiyi appears not like a threat to the companies. But Beijing sees the move as a rebellion as it has always considered Taiwan as part of its territory.
Tencent and iQiyi have become popular among Taiwanese people. The apps have over time won millions of users among Mandarin speakers, recording 114 million and 105 million in video service subscription respectively.
The decision to ban Tencent and iQiyi marks the first frontal action by Taipei against Chinese companies. China has been desperately trying to withstand US pressure through the help of other Asian countries, but sees its efforts yielding little result.
Last week, the United States Secretary of Health and Human Services Alex Azar paid a historic visit to Taiwan to convey President Trump’s support for the small island.
Since the bloody 1949 civil war separated Taiwan from mainland China, the democratic island has been gearing toward total independence from China. The emergence of Tsai Ing-wen as president following the 2016 election has plunged the relationship between Beijing and Taipei into further deterioration, as she is perceived by China as pro-independence.
The US sanctions are forcing Taiwan to further alienate itself from Beijing, a development China is obviously not happy about, and has been pushing to minimize US influence on Taiwan.
Earlier in the month, Chinese hackers were accused of pillaging Taiwan’s semiconductor industry. Under a campaign called Operation Skeleton Key, Beijing reportedly stole source code, software development kitts, chips designs etc. It appears that part of China’s strategy to reduce US influence on Taiwan includes stealing the semiconductor technology, which has been the mainstay of current Taipei’s relationship with Washington.
China depends on the United States for chips, as it has been struggling to develop a semiconductor industry that would serve the needs of its tech companies. As the US hammer hits harder on Huawei and other Chinese companies, its survival lies mainly on China’s ability to manufacture enough chips. It will not only help the Chinese tech industry, but will also cut the American leverage power over other countries that depend on its software and technology to manufacture chips.
The United States is apparently succeeding in getting more countries on its side as the conflict escalates to involve more Chinese apps. Asian countries are particularly rallying behind the US. India was the first to announce its decision to ban TikTok and other Chinese apps before Taiwan jumped the same terrain. Lawmakers from the Japanese ruling party have been pushing the parliament to take decisive action on Chinese apps.
Trump had last week added WeChat to the list of Chinese apps posing a security threat to the United States, and ordered that its US operations be sold to an American company within 90 days. On Tuesday, he announced further restrictions on Huawei that are aimed at stopping it from using third party chips built with US software.
Though the major companies at the center of the conflict; Huawei, TikTok and WeChat have denied any involvement with the Chinese government, their stance has done nothing to quell the sanctions, and it’s fast escalating.