James Crabtree is executive director of IISS-Asia in Singapore. He is author of "The Billionaire Raj."
President Joe Biden recently rolled back a ban on WeChat and TikTok pushed through by his predecessor, Donald Trump. To Biden's critics, the move hinted at a softer approach to Chinese technology companies, and indeed China in general.
That view is almost sure to be misleading. The fate of the two Chinese apps still looks far from certain. More important is Biden's new regulatory regime on data and technology -- which looks likely to be more coherent and potentially tougher on China than the rules they replace.
Back in August 2020, Trump launched executive orders banning both WeChat and TikTok as part of a flurry of measures to counter apparent security threats from Chinese companies operating in the U.S. TikTok, Trump suggested, might pass user data back to Bytedance, its Chinese parent. From there the data could, in theory at least, end up in the hands of China's security state.
TikTok strongly rejected such allegations and went on to successfully challenge Trump's order in court. Biden thus arrived in the White House to find a tough-sounding but legally hopeless policy framework sitting on his desk.
On June 9, the Biden administration duly junked Trump's orders. In their place came a review of how apps run by "foreign adversaries" might pose security risks to American user data. This now joins a host of other reviews, including one on TikTok run by the Committee on Foreign Investment in the United States (CFIUS) -- a government body that looks into foreign takeovers of U.S. companies.
More important is what Biden did not get rid of: other executive orders signed by Trump that laid out the start of a new regulatory approach to data flows and tech supply chains linked to China. Biden's team quietly accepted almost all of this, even while its TikTok and WeChat reversals made headlines.
Biden now looks set to push forward a new set of rules governing foreign-linked information and communications technology and services, or ICTS. This new ICTS regime is likely to give the U.S. Commerce Department far-reaching powers to establish a new, broad CFIUS-like review process, which among other things can examine the risks of data flowing to and from foreign countries.
The basic aim is to provide what the White House awkwardly calls a "criteria-based decision framework and rigorous, evidence-based analysis" for targeting foreign apps based on their country of origin. In other words, they want a process that could restrict or ban apps like TikTok but does not collapse in a heap in court.
Exactly how these new rules will develop is not yet entirely clear. Another review set up by Biden's team has asked the Commerce Department to come back with plans to develop the ICTS rules.
Yet the direction of travel seems clear enough. "Chinese tech companies might have welcomed Biden's rules, but they could end up harder than Trump's," as tech policy analyst Paul Triolo at Eurasia Group put it. "They [China] don't seem to realize what's coming, namely a well-organized effort that won't fall apart under legal challenge."
Whatever China thinks, U.S. tech companies are not happy. The potential ICTS rules could well place limits on a host of activities linked to the acquisition or use of foreign technologies, something Silicon Valley is keen to avoid. There is a risk of double jeopardy, too, meaning that future tech deals involving foreign companies could have to go through both the existing CFIUS process and this new ICTS regime.
There remains room for doubt about how this will work in practice, too. True China hawks worry that Biden's team lacks a pugilistic standard-bearer in the vein of former Secretary of State Mike Pompeo. Under the banner of the Clean Network, Pompeo used his final days in office to launch a host of aggressive but disjointed measures trying to create a new global anti-China tech alliance, covering everything from the security of submarine data cables to restrictions on equipment made by Huawei Technologies, the Chinese telecom giant.
Biden is less keen on all this. His team continues to court allies in Europe and elsewhere to be part of a putative anti-Chinese tech alliance. Clean Network branding has been junked, and Secretary of State Antony Blinken has struck a more measured tone.
There are other challenges, not least the fact that the U.S. lacks a coherent legal regime for data regulation. The fact that Washington has nothing in the vein of Europe's General Data Protection Regulation rules clearly makes it harder to use those nonexistent rules to target Chinese malfeasance.
Looked at more broadly, this ICTS process looks likely to be part of a broader panoply of rules that ratchet up pressure on China. Some might target particular technologies, stopping access to advanced semiconductors, for instance. Others will go after U.S. companies that want to use Chinese technology as part of their supply chains, especially if those companies are linked in any way to the Chinese military.
At the end of all of this there is still a chance that the U.S. operations of TikTok and WeChat might survive, although, given the prevailing sense of anti-Chinese sentiment brewing in Washington, even this looks unlikely. Rather than slowing down under Biden, tech decoupling only looks likely to accelerate.