Advertisement

What Amazon, Facebook, Google and other US tech companies are really after in China – data, not just market access

  • American tech companies want to offer cloud services in China so they can gain access to data on Chinese consumers. Beijing fears this allows US firms a way to influence opinions on more controversial subjects

Reading Time:3 minutes
Why you can trust SCMP
0
A man holds up a sign featuring an altered Google logo during a House Judiciary Committee hearing with Google CEO Sundar Pichai in Washington in December 2018. Photo: Bloomberg
The limitations that the US government has imposed on American companies doing business with Huawei, the arrest of Meng Wanzhou and US attempts to restrict where other countries buy their 5G technology are only small parts of a much bigger battle. A greatly under-reported topic in the current trade war gets much closer to the central issue. 
As well as fights about soybean shipments and intellectual property theft, one of the key topics under discussion in recent negotiations has been improving access for Amazon, Microsoft, Google, IBM and Apple to China’s rapidly expanding US$12 billion cloud computing sector.

Most reports on this suggest that the issue under discussion is market access, that it concerns China restricting US companies and denying them a business opportunity.

As with Huawei, though, the fight is really about security, economic power and sovereignty. With Huawei, the US fears that with the shift to 5G communications technology, China will control large parts of the networks across which the world’s data flows. It is not just about who provides the equipment. It is a question of who controls access to the internet’s plumbing.

For America’s hi-tech firms, China is different from almost every other market. They have failed to completely dominate the tech and information industry as they have almost everywhere else, largely because China is one of the few countries to have successfully established competitive rivals – firms like Weibo, Alibaba, JD.com, Baidu, Tencent and Lenovo. As a result, US firms have very little access to Chinese data.

Advertisement
Select Voice
Choose your listening speed
Get through articles 2-3x faster
1.1x
220 WPM
Slow
Normal
Fast
1.1x