Over a third of the world’s smartphone sales come from Chinese vendors Huawei, Xiaomi and Oppo. These manufacturers have thrived not only because they offer value-for-money handsets thanks to China’s supply chains, but they also enjoy a relatively open mobile ecosystem, in which consumers in most countries can freely access the likes of Google, Instagram and WhatsApp.
That openness is under attack as the great U.S.-China tech divide inches closer to reality, which can cause harm on both sides.
The Trump Administration’s five-pronged Clean Network initiative aims to strip away Chinese phone makers’ ability to pre-install and download U.S. apps. Under U.S. sanctions, Huawei already lost access to key Google services, which has dealt a blow to its overseas phone sales. Oppo, Vivo, Xiaomi, and other Chinese phone makers could suffer the same setback as Huawei, should the Clean Network applies to them.
For years, China has maintained a closed-up internet with the Great Firewall restricting a bevy of Western services, often without explicitly presenting the reasons for censorship. Now the U.S. has a plan that could potentially keep Chinese apps off the American internet.
The Clean Network program was first announced in April as part of the Trump Administration’s efforts in “guarding our citizens’ privacy and our companies’ most sensitive information from aggressive intrusions by malign actors, such as the Chinese Communist Party.”
Beijing said Thursday it’s firmly opposed to U.S. restrictions on Chinese tech firms and blasted that the U.S. uses such actions to preserve its technology hegemony.
Many on Chinese social media compare Trump’s Clean Network proposal to routine cyberspace crackdowns in China, which regulators say are to purge pornography, violence, gambling, and other ‘illegal’ activities. Others that espouse a free internet lament its looming demise.
It’s unclear when the rules would be implemented and how they would be enforced. The program also aims to remove ‘untrusted’ Chinese apps from US app stores. A TikTok ban is looking less likely as Microsoft nears a buyout, but other Chinese apps also have a big presence in the U.S. Many, like WeChat and Weibo, target the diaspora community, while players like Likee and Zynn, owned by Chinese firms, are making waves among local users.
Chinese firms are already hedging. Some like TikTok have set up overseas data centers. Others register their entities abroad and maintain U.S. offices, while still resorting to China for cheaper engineering talents. It’s simply impractical to investigate — and hard to determine — every app’s Chinese origin.
Under the program, carriers like China Mobile are not allowed to connect with U.S. telecoms networks, which could prevent these services from offering U.S. roaming to Chinese travelers.
The initiative also tells U.S. companies not to store information on Chinese cloud services like Alibaba, Tencent, and Baidu. Chinese cloud providers don’t find many clients in the U.S., perhaps except when they are hosting data for their own services, such as Tencent games serving American users.
Lastly, the framework wants to ensure U.S. undersea cables connecting to the world “are not subverted for intelligence gathering by the PRC at hyper-scale.”
Such sweeping restrictions, if carried out, will almost certainly trigger retaliation from China. But what bargaining chips are left for Beijing? Apple and Tesla are the few American tech behemoths with significant business interest in China.
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