Beijing’s spar with world powers dims global expansion prospects of China’s top tech firms
SHANGHAI/BEIJING (CHINA) – Huawei Technologies’ founder Ren Zhengfei has global ambitions so much so that the firm’s new campus in southern China sports buildings that are replicas of ones in European cities.
Zhang Yiming, founder of ByteDance that owns TikTok, has pasted posters of former Google CEO Eric Schmidt’s book “How Google Works” in his Beijing headquarters and has always dreamt of building a global company strong enough to compete with tech giants in the US.
However, the strained relations between China and countries such as US, India, Australia and the UK have overshadowed the ambitions of big Chinese firms to challenge US dominance.
Chinese firms such as drone-maker DJI, artificial intelligence firms Megvii, SenseTime and iFlytek, surveillance camera vendor Hikvision and e-commerce conglomerate Alibaba Group are in the list of companies losing access to global markets.
Even smaller firms in China are forced to rethink.
“What we are experiencing now is unprecedented,” said the founder of a startup with operations in India and the US. “My entrepreneurial spirit has been dampened due to all this, let alone global ambitions.”
The situation has changed a lot since last year when Washington’s trade war with Beijing and security issues over Huawei had little impact on tech giants in China.
SenseTime and Megvii, which are backed by US investors, were targeting big IPOs. TikTok unit was also witnessing unbridled growth overseas. Alibaba was eyeing global prospects for its cloud business while DJI was consolidating domination of the drone business.
But they were hit when US imposed sanctions against Chinese companies last October which was triggered by suppression of the minority Uighur Muslims in Xinjiang.
Ahead of the presidential election, US President Donald Trump has stepped up anti-China rhetoric, forcing his Chinese counterpart President Xi Jinping to adopt a tough stance. Ties have been further strained with the passing of the new security law for Hong Kong. A bloody border skirmish with Indian troops led to New Delhi banning 59 Chinese apps.
Top Chinese tech players face cancellation of contracts, banning of their products and investments in major economies and more sanctions are on the anvil.
ByteDance could be forced to sell TikTok as the US is mulling following India in banning the app, which analysts say is worth $20 billion.
Bans on its network equipment could also cost Huawei billions of dollars in revenue and more countries are following the US and UK in blocking the telecoms equipment manufacturer’s products.
The US Interior Department has grounded the privately held DJI’s fleet and halted additional purchases citing data security risks. More restrictions are likely.
When its popular browser was banned in India, Alibaba Group was forced to cut staff at its UC Web subsidiary.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field