China

Biden’s plan for Chinese tech companies? It could look a lot like Trump’s.

Experts expect more polish and less chaos from the new administration, but a multilateral approach could make life harder.

Gina Raimondo

Commerce secretary nominee Gina Raimondo pledged at her confirmation hearing Tuesday to take "aggressive trade enforcement actions to combat unfair trade practices from China."

Photo: Jonathan Ernst/Getty Images

If Tencent, Alibaba, ByteDance and Huawei thought they were going to have an easier go of it once Donald Trump left the White House, they may be in for a rude awakening.

President Joe Biden's team has resisted offering specifics about how it plans to approach China's tech giants after four years of hawkish, and oftentimes chaotic, relations under Trump; White House Press Secretary Jen Psaki says the new administration is currently conducting an interagency review as it seeks to develop a holistic China policy.

But experts expect President Biden's China strategy to look like a more polished and multilateral version of Trump's as his team pushes forward a slew of policies aimed at curtailing the power and influence of Chinese tech companies in the U.S.

"Biden is most likely, on the technology front, going to keep things the way the Trump administration has made them," said Abishur Prakash, a geopolitics expert at the Center for Innovating the Future. "Whether it's regarding Alipay, whether it's regarding TikTok, whether it's regarding Chinese STEM students — across the board holistically, there's not a lot of space for change."

Biden, in the coming weeks and months, will make decisions about which Trump-era policies he wants to keep in place and which he wants to change or rebrand. For instance, the Commerce Department did not immediately respond to questions about whether it is moving forward with Trump's eleventh-hour executive order banning U.S. transactions with eight Chinese apps, including Ant Group's Alipay and Tencent's WeChat Pay. And officials have not yet said whether they plan to move forward with shelved plans to blacklist Alibaba, Tencent and Baidu or follow through with the TikTok ban.

But Commerce secretary nominee Gina Raimondo pledged at her confirmation hearing Tuesday to take "aggressive trade enforcement actions to combat unfair trade practices from China," and she said she intends to "use the full toolkit at my disposal, to the fullest extent possible, to protect Americans and our network from Chinese interference or any kind of backdoor influence." She named Huawei and ZTE in particular.

Psaki said the new administration plans to hold China "accountable."

"Technology ... is of course at the center of U.S.-China competition," Psaki said on Monday. "China has been willing to do whatever it takes to gain a technological advantage — stealing intellectual property, engaging in industrial espionage and forcing technology transfer." She added: "The president's view is we need to play a better defense, which must include holding China accountable for its unfair and illegal practices and making sure that American technologies aren't facilitating China's military build-up."

That strategy will also involve shoring up U.S. manufacturing, an effort Biden kickstarted this week with his "Buy American" executive order, which directs federal agencies to purchase products and services from U.S. workers and businesses. The effect of that order on tech's supply chains will be minimal, experts said, but the philosophy behind it will be key over the next four years. "One of the things you're going to see early on [in Biden's presidency] is a focus on investing domestically in our people, in our economy, in our democracy," said Brian Deese, incoming director of the National Economic Council, at a tech conference earlier this month.

Influential leaders, including former Google CEO Eric Schmidt, are calling for the "bifurcation" of the U.S. and Chinese sectors in a new report this week, advocating for the U.S. to invest in domestic infrastructure as well as "ally-centric production."

The Biden approach to Chinese technology issues will be different than Trump's in at least one key area: Biden officials have said they plan to work with other Western democracies to create a united front against China's influence. "Whether the techno democracies or the techno autocracies are the ones that get to define how technology is used — the technology that dominates all of our lives — I think is going to go a long way to shaping the next decades," Anthony Blinken, who was confirmed Tuesday as secretary of state, said last week.

Martijn Rasser, a senior fellow with the Center for a New American Security, predicts that the Biden administration will "rebrand" former Secretary of State Mike Pompeo's "Clean Networks" initiative, which asked U.S. allies to join a pledge excluding apps and carriers owned by Chinese firms.

"By and large, a lot of our allies have already signed up for Clean Networks or at least expressed general agreement with the goals and principles of it," Rasser said. "It's more so how it's packaged, how it's portrayed in diplomatic exchanges and so forth. I think that's where the biggest change will be, not so much the substance or the goals."

Meanwhile, the Chinese government is engaged in its own antitrust crackdown against the tech giants, proposing a new set of regulations aimed at curtailing their monopoly power. "If you're Alibaba or Tencent or Huawei or Baidu, you're already under siege at home," Prakash said. "You're already rethinking your corporate strategies, rethinking how do you expand and do anything."

And that pressure will only be compounded as the U.S. turns to allies including Japan, Australia and the EU to encourage them to stave off the growing influence of the Chinese tech giants. "If there is a unified approach by the leading democracies, that would be a significant headwind for these companies because then any growth that they would have outside of China [is] not in the most interesting markets," said Rasser. He named South America, Pakistan and Nigeria as a few places where they could expand, but he said that potential would be limited. The push could force the huge Chinese conglomerates to look more like "very large regional companies," he said.

And Biden likely won't choose to take on the companies one by one, predicted Adam Segal, chair in emerging technologies and national security at the Council on Foreign Relations. Instead, his administration will focus on particular industries, like semiconductors, and national security risks, like data privacy.

"The [Biden administration] will try to create a more coherent, focused domestic set of regulations that also includes the Chinese firms and other international firms as opposed to going ad hoc, whack-a-mole on specific Chinese firms," Segal said.

In other words, Biden probably won't be waging a PR battle against TikTok anytime soon.

Podcasts

Crypto’s big crash

Is the tech superbubble about to burst?

red and blue light streaks
Photo by Maxim Hopman on Unsplash

This week, we're diving into the crypto crash. What led luna to fall off a cliff? Are we seeing the dot-com bust, part two? Protocol fintech editor Owen Thomas explains it all to us. Then entertainment reporter Janko Roettgers joins us to share the inside scoop on his exclusive interview with Mark Zuckerberg. We learn why Meta is betting it all on the metaverse and Brian finally gets to ask the most pressing question on his mind this week: What does Mark smell like?

And finally, Caitlin and Brian take a moment to reminisce about the iPod, which was put out to pasture this week after more than two decades on the market.

Keep Reading Show less
Caitlin McGarry

Caitlin McGarry is the news editor at Protocol.

Sponsored Content

Foursquare data story: leveraging location data for site selection

We take a closer look at points of interest and foot traffic patterns to demonstrate how location data can be leveraged to inform better site selecti­on strategies.

Imagine: You’re the leader of a real estate team at a restaurant brand looking to open a new location in Manhattan. You have two options you’re evaluating: one site in SoHo, and another site in the Flatiron neighborhood. Which do you choose?

Keep Reading Show less
Enterprise

Say goodbye to unicorns. The cloud centaurs are here.

Protocol caught up with Bessemer Venture Partners’ Kent Bennett to discuss the state of the cloud, the new SaaS models poised to make a dent on the industry and why the firm developed a new SaaS milestone.

Bessemer Venture Partners developed a new SaaS milestone that it’s calling the “centaur,” for startups that reach over $100 million in annual recurring revenue.

Photo: Bessemer Venture Partners

Kent Bennett thinks the SaaS business model is the “greatest business model in the history of the planet.” As a partner at Bessemer Venture Partners, it’s fitting that he’s bullish on the cloud: Bennett was one of the main authors of Bessemer’s annual State of the Cloud report, which gives a bird's eye view of what’s happening in the cloud economy.

In the report, Bessemer analyzed everything from the new ways SaaS companies are trying to monetize their software to what areas are still underserved by SaaS. The firm also developed a new SaaS milestone that it’s calling the “centaur,” for startups that reach over $100 million in annual recurring revenue.

Keep Reading Show less
Aisha Counts

Aisha Counts (@aishacounts) is a reporter at Protocol covering enterprise software. Formerly, she was a management consultant for EY. She's based in Los Angeles and can be reached at acounts@protocol.com.

Climate

The future of electrification, according to Google Trends

People are searching more often for how to electrify their lives, from induction stoves to e-bikes.

From “induction stove” to “home EV charging,” search interest is rising.

Photo: Michael Tuszynski via Unsplash

Feeling cynical about the state of the climate? Well, it’s hardly a guarantee of a liveable climate, but a peek at Google Trends might provide a glimmer of hope.

People are increasingly ready for the all-electric future at home and on the road. From “induction stove” to “home EV charging,” search interest is rising. And while climate change is certainly not up to the individual to solve — that’s mainly on governments and corporations — shifts in public tastes can bring about policy changes. Fast. (See: outdoor dining in major cities; marriage equality.)

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (ljenkins@protocol.com).

What Elon's Twitter 'hold' even means

The answers to all the Musk-iest Twitter acquisition questions.

Keep in mind that Elon Musk isn't exactly known for telling the truth.

Photo illustration: Getty Images; Unsplash; Protocol

Elon Musk can tweet anything he likes, because he’s Elon Musk, and he’s buying Twitter, and free speech is awesome. What he can’t do is make false tweets true.

Musk said Friday that the Twitter deal was temporarily on hold while he looked into a report that spam bots and other fake accounts made up less than 5% of its users. He added, hours after his first tweet, that he was “still committed to [the] acquisition.” Investors promptly sold off shares of Twitter, thinking that Musk’s words somehow had meaning, embodied intent or otherwise had an impact on the world. They did not, eppur si muove, and yet the stock market moved.

Keep Reading Show less
Owen Thomas

Owen Thomas is a senior editor at Protocol overseeing venture capital and financial technology coverage. He was previously business editor at the San Francisco Chronicle and before that editor-in-chief at ReadWrite, a technology news site. You're probably going to remind him that he was managing editor at Valleywag, Gawker Media's Silicon Valley gossip rag. He lives in San Francisco with his husband and Ramona the Love Terrier, whom you should follow on Instagram.

Latest Stories
Bulletins