The US-China tech rivalry will continue to come under intense scrutiny for Chinese companies

Chinese companies will continue to face intense scrutiny as US-China tensions and competition are unlikely to ease anytime soon, an analyst told CNBC.

“There is this intense geopolitical competition. Chinese companies are under a ton of scrutiny, in part because of their ties to the Chinese Communist Party,” Lindsay Gorman, senior fellow for emerging technologies at the German Marshall Fund’s Alliance for Securing Democracy, told CNBC’s “Squawk Box Asia” Tuesday.

Last Thursday, TikTok CEO Shou Zi Chew was questioned by lawmakers for five hours about the app’s ability to operate independently of its Chinese parent company ByteDance.

The short-video app is facing a potential ban in the US over concerns that American user data could end up in the hands of the Chinese government. Chew said China-based ByteDance employees may have access to some US data from TikTok.

It’s a really intense competition [between the U.S. and China]. This is why both sides are fighting so hard to ensure their own technologies are victorious.

Lindsay Gorman

Senior Fellow, Alliance for Securing Democracy of the German Marshall Fund

“I think it’s important to look at the broader context of the Chinese Communist Party’s efforts to interfere in democratic institutions to suppress free speech and democracies,” Gorman told CNBC.

China had said it would “strongly oppose” a forced sale of TikTok by its parent company ByteDance hours before Chew testified before the US Congress.

Under the sea

Both countries are also competing for control of undersea cables – the backbone of the internet. More than 99% of the world’s communications are carried over fiber optic cablesmost underwater.

Huawei and China Telecom have built underwater cable networks around the world.

The US and China are vying for technological dominance “because of this fundamental internet infrastructure,” according to Gorman.

“Whoever is building the infrastructure and gaining dominance in industries that we are building today and for the future — whether it’s artificial intelligence, undersea cables or quantum information systems, they’re going to be the leaders of the future and the world,” he said .

The battle for the internet, under the sea

“That’s why both sides are fighting so hard to let their own technologies win,” she added, noting that US-China technological competition “is really not going away.”

The US, concerned that China is spying on undersea cables, has reportedly obstructed several Chinese projects to build undersea cable networks since 2020, according to a Reuters.

The US Congress on Monday passed the Undersea Cable Control Act Preventing countries like China from “acquiring American-made goods and technology used in the development and support of undersea cables.”

This really speaks to how intertwined the technological ecosystems of the US and China are and have been.

Lindsay Gorman

Senior Fellow, Alliance for Securing Democracy of the German Marshall Fund

“Whether it’s TikTok or a spy balloon, the US has been caught flat-footed in its fight against Chinese influence. We cannot allow undersea cables to become another example of this trend,” US Congressman Brian Mast said in the release.

“We cannot empower the same China that wants to overthrow America and put communism on top to control one of the world’s most powerful communications tools. We must protect this infrastructure and technology that Americans rely on every day,” Mast said.

In response to the passed law Chinese Foreign Ministry spokesman Mao Ning said, “We oppose the US overextending the concept of national security to hinder foreign companies and abuse state power to disrupt normal market rules and regulations. The pursuit of ‘competitive advantage’ does not legitimize bad behavior.”


The Tiktok hearing was an

“It really speaks to how intertwined the US and China’s technology ecosystems are and have been,” Gorman said, adding that US companies like Apple “rely on China for a majority of their businesses.”

This complicates the “decoupling of US tech ecosystems from Chinese tech ecosystems,” she said.

“These ties are obviously very tight. It’s not going to be a one-time decoupling,” Gorman said.

“It’s not going to be particularly smooth, and we’re seeing that with US and other multinationals that still have very strong ties to China.”

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