By CHARITY NYARAYI MATIZANADZO
Global Business Journalism reporter
Caught in the middle of the tech cold war between the U.S. and China, Chinese corporations have suffered damage to their reputations and operations, fueled by the coverage of the rivalry by Western media, a Financial Times editor told Global Business Journalism students on Nov. 17.
The Trump administration’s strategy to halt China’s technological growth through either imposing sanctions or slapping tariffs on its companies and products has disrupted the global supply chain and damaged reputations of Chinese firms, said Wang Feng, the editor-in-chief of FTChinese.
“A quite emotional issue for them apparently is the ‘original sin’ of being a Chinese company in the world,” Feng said during a virtual lecture at Tsinghua University.
While American government officials say their actions are based on legitimate fears of Chinese espionage, Feng noted that executives from some of the largest Chinese internet firms believed their companies were being unfairly targeted by the Western governments, media outlets and think-tank communities.
“Most of them believe that this is a general Western issue,” he added. “And [Donald] Trump’s relentless pursuit of Chinese companies and drive to kill Huawei, TikTok and WeChat further consolidated this sentiment within the Chinese business community.”
Inspired by the “original sin” concept, Feng created a logic flowchart based on the perspectives drawn from Chinese businesses, detailing the challenges they face in the U.S. and other countries.
Comprised of various segments, his flowchart displayed the lines of attack on Chinese firms. The businesses were divided into several categories: state-owned or telecommunication companies, those involved in fields that consist of defense, aviation, space, or military-civil fusions, and companies that employ Chinese ethnic minorities such as Uighurs.
According to the chart, any answers provided by the respondents place their companies under suspicion in Western dialogues because of “the way the West perceives the special relationship between Chinese companies and the State.”
Feng stated that much of the international coverage had painted a picture describing how the State exerts control over all Chinese companies.
“Many of the narratives, especially on the frozen IPO of the Ant Group, serve as an example of how the Chinese State is trying to control the vibrant business community,” said Feng.
The implications of tying the businesses to the State has aroused challenges for telecommunications or 5G companies. Feng contended that the tech war restrictions had compelled Huawei to sell its Honor smartphone division to a state-owned consortium and this evoked emotional coverage from Chinese media outlets.
“The coverage has been about how the U.S.’ ‘evil plan’ to kill Huawei has forced this great company to cut off its arm,” he stated.
The move by the U.S. policymakers of “just striking at any Chinese company without a reason,” has left firms like AI, Ant, Alibaba and WeChat as casualties of the tech war, he added. This had been complicated by the U.S. Entity List, which hinders companies classified as a security risk from buying or using any U.S. products in the absence of a license.
Apart from these strategic plans to curb China’s production, data has been used as a weapon in the feud between two of the world’s largest economies.
“Data is a highly sensitive area of commerce between China and the U.S.,” Feng remarked. “The Committee on Foreign Investment in the United States (CFIUS), has become infamous in China for stopping or reversing some of the biggest cross-border mergers and acquisitions.”
Feng shared that CFIUS has reviewed and reversed acquisitions by Chinese companies on grounds of threats to U.S. national security over China’s access to sensitive health information, and alleged development of genetic weapons using Americans’ health data. Among those ordered to reverse the M&As are iCarbonX, Kunlun and Shiji.
“Anytime a Chinese company makes an acquisition of a U.S. company that potentially could have access to large amounts of private citizens’ personal data, it becomes very suspicious so much that CFIUS steps in and forces it to sell.”
Feng said the cold war was kicked off by a speech by Vice President Mike Pence in October 2018. While not questioning the independence of global media, he noted that coverage questioning China’s high-tech supply chain has dominated in the global media since the Trump administration’s anti-China PR push began. Many of the stories are factually accurate, he noted. And he praised the work of several mainstream outlets including Reuters, The New York Times and The Washington Post.
But he raised doubts about some stories, specifically a report written by Professor Christopher Balding in 2019 alleging Huawei had a “dodgy relationship with the Chinese government.” The story, he said, was an example of narratives that have heightened doubt over Huawei’s credibility.
Like China’s role in the global spread of the COVID-19 pandemic, Huawei’s case “became a trial by the media and the verdict was decided even before the trial had started,” Feng said, adding that most of the stories “contain sensitive allegations, move the market and badly hurt the involved companies.”
“Chinese companies feel that when wronged by the Western news organizations, there is no way they can get to redress or go to a court to clear their names,” Feng remarked.