Why China has the upper hand in corporate proxy wars with US

When I was growing up in Ronald Reagan’s America, the small proxy wars that the US fought with the Soviet Union were a regular feature of the copies of the Boston Globe I delivered every morning. There would be tragic news out of Afghanistan on the front page one day, El Salvador or Nicaragua the next.

The US won that contest when the Soviet Union dissolved in the early 1990s and it would be almost 30 years before the political class in Washington decided they had another geopolitical rival of Soviet proportions — President Xi Jinping’s China. But now proxy wars between the two reigning superpowers are fought over companies, not client states, and it is China that has the early lead.

The tussle over TikTok has highlighted the corporate chess matches that Mr Xi and his US counterpart, Donald Trump, have engaged in for more than two years now.

As it stands, Mr Trump cannot seem to make up his mind about whether he will approve a deal that allows ByteDance, the video app’s Beijing-based parent company, to keep majority control of TikTok’s US operations — albeit with certain safeguards to keep US user data onshore. Mr Xi’s administration, on the other hand, has maintained a steely silence over its bottom line.

In this regard, the saga is reminiscent of the first US-China…

Read The Full Article