President Trump has fired the first data bullet to China: “ban TikTok and Wechat from operating in the US in 45 days if they are not sold by their Chinese parent companies”. This is not a small playbook from the U.S. The stake here is huge for most companies including African companies Tencent has invested in. Because most African tech-startups are incorporated in the US, this ban will keep their legal units busy. To avoid causing issues for these firms, let me not mention them, but Tencent has funded and supported most startups in Africa, including Nigeria.
President Trump has signed an executive order to ban U.S. transactions with ByteDance, the parent company of TikTok, as well as WeChat owner Tencent. The move was issued under the International Emergency Economic Powers Act and comes into effect in 45 days, following growing tensions with China over security concerns. Microsoft (LinkedIn’s parent company) is currently in talks to acquire the U.S. operations of video-sharing app TikTok, which has up to 80 million active monthly users in America (LinkedIn)
With this ban, it is all-level assaults as two great nations battle for the soul of the 21st century. In the last ten centuries, China has ruled in at least six, economically. But the U.S. is the economic leader now and doing all to keep it that way. When Alibaba Group’s Ant Financial could not get MoneyGram, I knew quickly that the U.S. was going to battle on data. Here we are: the first world data warfare.
Humans are the same, the only difference is the economic opportunity which shapes behaviour to a large extent. Since the pandemic began, crime has risen in most parts of the developed world as people do crazy things to survive. Fighting for data becomes the path to that future survival.
China is ferociously competitive and the U.S. is going for collateral damage to defend its castle. No one is safe and there would be many unintended consequences. MTN Group is selling assets in the Middle East as it works partly to avoid this indirect tension.
How would China respond? Ban Microsoft Windows or Apple iPhone? Not really because those would be own-goals to China. For every Windows sold, China makes money because the machines which power Windows are largely assembled in China for Dell, HP, Lenovo and others. Of course, despite the latest re-localization, China remains the lab for assembling Apple products. I think China will just chill – it has met an unpredictable American leader that cannot be modeled by any communist party algorithm. That would be wisdom because any nonsense move, Trump can delist all Chinese companies in Wall Street!
Meanwhile, it is party time for Facebook with this assault on TikTok. The founder has crossed $100 billion in wealth. The Reels does not need to be great; it simply needs to be ok. With other Instagram features, many will stick with it as not many would like to have many apps in their phones. Instagram brings a unification in this space and having many features in one app saves time and helps many people.
Instagram is taking on TikTok with the global launch of short-form video rival Reels. It debuted in 50 countries, including the U.S., on Wednesday, and Facebook is offering lucrative incentives to popular TikTok creators to woo them over to Reels. The new rivalry is unfolding as TikTok faces an uncertain future in the U.S., though Microsoft (LinkedIn’s parent company) is in talks to acquire U.S. operations. TikTok’s CEO accepted the challenge from Instagram by saying “bring it on.”