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  • The city without TikTok offers a window to America’s potential future | CNN Business

    The city without TikTok offers a window to America’s potential future | CNN Business

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    Hong Kong
    CNN
     — 

    Across the United States, more than 150 million people are being faced with the possibility of a new reality: life without TikTok.

    The wildly popular short-form video app has been at the center of an ongoing battle, with lawmakers calling for an outright ban, and the company portraying itself as a critical community space, educational platform and just plain fun.

    In Hong Kong, there’s no need to imagine that reality: TikTok discontinued its services there in 2020.

    Its abrupt departure was met with mixed reactions: disappointment from some users and content creators, but also relief from others who say life is better without the app’s infinite scroll.

    At the time of its exit, TikTok had a relatively modest presence in the city and was not ubiquitous like it is in the US today.

    But the varied reactions to its departure, and the way users have pivoted to other platforms or even real-life offline communities, offer Americans a glimpse into their potential TikTok-less future.

    TikTok announced its exit from Hong Kong in July 2020, a week after China imposed a controversial national security law in the city. The decision came as the app tried to distance itself from China and its Beijing-based parent company ByteDance, in the face of growing pressure in the US under the Trump administration.

    But it meant a jarring halt for creators like Shivani Dukhande, who had roughly 45,000 followers at the time the app left Hong Kong.

    Dukhande, 25, saw her account take off in early 2020 during the pandemic, with lifestyle content such as cooking and wellness videos flourishing on the platform.

    “There were a lot of new creators emerging,” she said. “We used to all collaborate together, we had a chat where we would all speak and share ideas and it created a community.”

    Momentum began to build. Companies started reaching out to Dukhande, paying for sponsored content and collaborating on ad campaigns. Brands began partnering with creators on trending “challenges” in a bid to attract young new consumers.

    “More people were joining and it was becoming such a fun thing to do,” she said. “Then, it just kind of went away one morning.”

    “If it continued, then I probably could have made enough to have quit my 9 to 5,” she said. “If I had the chance to grow, it could have been a potential career path.”

    This is one of the main arguments TikTok has made in recent weeks in the US. In March, as the company’s CEO prepared to testify before Congress, TikTok produced a docuseries highlighting American small business owners who rely on the platform for their livelihoods.

    The platform is used by nearly five million businesses in the US, TikTok said in March. And it’s set to surpass rivals: London-based research firm Omdia projected in November that TikTok’s advertising revenues will exceed the combined video ad revenues of Meta – home of Facebook and Instagram – and YouTube by 2027.

    This is partly because people are spending more time on TikTok. In the second quarter of 2022, TikTok users globally spent an average of 95 minutes per day on the app, according to data analytics firm SensorTower – nearly twice as much time as users spent on Facebook and Instagram.

    Shivani Dukhande had created videos about wellness, lifestyle, food and Hong Kong on her TikTok account.

    But in Hong Kong, other platforms have jumped in to fill the gap. Reels, Instagram’s short-form video product, with similar features as TikTok such as an endless scroll, is growing quickly – and Dukhande has gotten on board.

    She had to rebuild her audience from scratch, and now has 12,500 Instagram followers, but she feels optimistic about its growth. Still, the loss of TikTok was a “missed opportunity,” she said, and the burgeoning community of creators has largely faded from sight.

    “The amount of jobs, the amount of content creation, the amount of marketing opportunities that were there with TikTok – we sort of missed out on that whole chunk of it.”

    But for some people, TikTok’s departure was a welcome change.

    Poppy Anderson, 16, has been using TikTok since its launch in 2018. And, like many others in her generation, she would spend hours “scrolling and scrolling” – even when feeling unfulfilled.

    “It was very easy to kind of find exactly what you like on there, because the [algorithm-run] For You page kept you there,” she said. “And it’s entertaining, but you don’t really get anything from it.”

    She described TikTok as often being a toxic environment that breeds narrow thinking, herd mentality, a misguided “cancel culture” and inappropriate online behavior such as critiquing the bodies of girls and women. Even people she knew in real life began acting differently after joining the app, which strained friendships, she said.

    Martin Poon, 15, also grew weary of TikTok, but it was hard to quit.

    “Everyone was using it, so I feel like there was a sense that you have to use it, you have to be on top of things, you have to know what’s going on. And I think that was stressful to me,” he said.

    Misinformation and misogyny ran rampant on TikTok, with accounts like those of Andrew Tate, the self-styled “alpha male” recently detained in Romania on allegations of human trafficking and rape, gaining popularity among boys at Poon’s school.

    “It’s just concerning how [these accounts] have so much impact on the youth, and it has so much grip on what we think and how it affects our behavior,” said Poon – though he added that misinformation is a major problem on all social media platforms, not just TikTok.

    Experts have long worried about the impact of TikTok on young people’s mental health, with one study claiming the app may surface potentially harmful content related to suicide and eating disorders to teenagers within minutes of them creating an account.

    In response to growing pressure, TikTok recently announced a one-hour daily screentime limit for users under 18, though users will be able to turn off this default setting.

    Anderson acknowledged some positives about TikTok, like open conversations about mental health. Still, she was glad when the app became inaccessible. Falling asleep became easier without the lure of TikTok. “I didn’t have the self control to get off it on my own,” she said.

    For Poon and his friend Ava Chan, also 15, TikTok’s disappearance sparked new beginnings.

    When the app left in 2020, they were doing online classes, isolated from friends and bored at home. At the time, Instagram Reels and YouTube Shorts had yet to arrive in Hong Kong.

    “We had to figure out how to use our time other than being on TikTok,” said Chan. “For us, that was exploring our passions more.”

    For both, that came in advocating for the neurodiverse community. They launched a club at school that spreads education and awareness about neurodiversity, as well as participating in volunteer activities with neurodiverse people.

    Both said it lent them a sense of purpose, and as time went on, they saw other benefits.

    Their friends, who would previously spend time filming and watching TikToks together, began having more face-to-face conversations. They noticed peers begin exercising outdoors more, which was made easier as Covid restrictions lifted. Their mental health improved.

    Of course, being teenagers, they’re not off social media entirely and use it as a tool to promote their club – but it’s far from the previous hours of scrolling. And while they occasionally wonder what’s happening on TikTok outside Hong Kong, the allure of it is lost when nobody else around them uses it either.

    “A lot of people, they’ve just kind of forgotten about it,” said Anderson. “People move to different platforms – or just move on.”

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  • Chipmakers look to Japan as worries about China grow | CNN Business

    Chipmakers look to Japan as worries about China grow | CNN Business

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    Japanese Prime Minister Fumio Kishida said he welcomed and expected more investment from global chipmakers, after meeting top executives on Thursday before a Group of Seven summit.

    China is set to be high on the agenda of the annual G7 leaders meeting that begins on Friday, with the United States increasingly urging its allies to counter the Asian giant’s chip and advanced technology development.

    Growing Taiwan and US tensions with China have brought serious challenges to the semiconductor industry. Taiwan is a major producer of chips used in everything from cars and smartphones to fighter jets.

    Ensuring diversified, resilient supply chains is a key component of the economic security theme being emphasized by Japan at the talks, White House national security adviser Jake Sullivan told reporters on Air Force One.

    Kishida told the executives, including those from Micron Technology Inc

    (MU)    , Intel Corp

    (INTC)     and Taiwan Semiconductor Manufacturing Co

    (TSM)     (TSMC), that stabilizing supply chains would be a topic of discussion at the G7 talks in the western city of Hiroshima.

    “I am very pleased with your positive attitude towards investment in Japan, and would like the government as a whole to work on further expanding direct investment in Japan and support the semiconductor industry,” Kishida said.

    An industry ministry official later said Kishida wanted to foster cooperation to strengthen semiconductor supply chains, while Industry Minister Yasutoshi Nishimura said Japan would use 1.3 trillion yen ($9.63 billion) of the supplementary budget from the last fiscal year to support its chip business.

    In particular, Kumamoto prefecture in southwestern Japan is quickly becoming a hotbed for tech investment from companies including TSMC and Fujifilm Holdings Corp

    (FUJIF)    .

    Micron said in a statement that it would bring extreme ultraviolet (EUV) technology to Japan, becoming the first semiconductor company to do so, and expected to invest up to 500 billion yen ($3.6 billion) with support from the Japanese government.

    Bloomberg News reported the financial incentives would total about 200 billion yen.

    An industry ministry official said no decision had been made on whether Japan would give a subsidy to Micron, but that one would be made as soon as possible.

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  • Nvidia says US curbs on AI chip sales to China would cause ‘permanent loss of opportunities’ | CNN Business

    Nvidia says US curbs on AI chip sales to China would cause ‘permanent loss of opportunities’ | CNN Business

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    Hong Kong
    CNN
     — 

    Nvidia warned Wednesday that if the United States imposes new restrictions on the export of AI chips to China, it would result in a “permanent loss of opportunities” for US industry.

    The company’s chief financial officer, Colette Kress, said she didn’t anticipate any “immediate material impact” but tighter curbs would impact earnings in the future.

    US officials plan to tighten export curbs announced in October to restrict the sale of some artificial-intelligence chips to China, according to multiple media reports, including the Wall Street Journal and Financial Times. Washington has ramped up efforts to cut China off from key technologies that can support its military.

    The US Department of Commerce has not replied to a CNN request for comment.

    The rules, as reported, could make it harder for companies like Nvidia

    (NVDA)     to sell advanced chips to China. Fueled by a boom in demand for its AI chips, the company briefly hit a market capitalization of $1 trillion in late May.

    “We are aware of reports that the US Department of Commerce is considering further controls that may restrict exports of our A800 and H800 products to China,” Kress told an investment conference.

    “Over the long-term, restrictions prohibiting the sale of our datacenter GPUs to China, if implemented, would result in a permanent loss of opportunities for US industry to compete and lead in one of the world’s largest markets and impact on our future business and financial results,” she said.

    GPUs refer to graphics processing units, which are chips or electronic circuits capable of rendering graphics for display on electronic devices.

    “Given the strength of demand for our products worldwide, we do not anticipate that such additional restrictions, if adopted, would have an immediate material impact on our financial results. We do not anticipate any immediate material impact on our financial results,” Kress added.

    Last October, the Biden administration unveiled a sweeping set of export controls that ban Chinese companies from buying advanced chips and chip-making equipment without a license.

    The new move is aimed in part at Nvidia’s A800 chip, which the US-based company created following the introduction of last year’s curbs in order to continue to sell to China, Bloomberg reported.

    China is a key market for Nvidia. Revenues from mainland China and Hong Kong accounted for 22% of the company’s revenue last year, according to its financial statements.

    On Wednesday, shares of Nvidia slumped as much as 3.2%, before recouping some of the losses. It ended down 1.8%. Chinese AI stocks suffered much heavier losses.

    Inspur Electronic Information Industry fell by 10%, the maximum allowed, on Wednesday in Shenzhen. It dropped again by 5.3% on Thursday. Chengdu Information Technology of Chinese Academy of Sciences slid 12% on Wednesday. Baidu

    (BIDU)    , which is developing a rival to ChatGPT, sank 4.4% on Thursday in Hong Kong.

    “The US could ruin China’s AI party,” Jefferies analyst said in a research note. Local chipsets do not have Nvidia’s GPU ecosystem, thus every update may require reworking, resulting in lower efficiency and higher costs.

    The Biden administration’s chip curbs would be “much more effective” in limiting China’s advances in military power driven by AI than rules restricting US investment in China’s tech sector, the analysts added.

    China has strongly criticized US restrictions on tech exports, saying earlier this year that it “firmly opposes” such measures.

    In May, Beijing banned Chinese operators of critical information infrastructure from buying products from Micron Technology

    (MU)    , in apparent retaliation against sanctions imposed by Washington and its allies on the country’s chip sector.

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  • China imposes sales restrictions on Micron as it escalates tech battle with Washington | CNN Business

    China imposes sales restrictions on Micron as it escalates tech battle with Washington | CNN Business

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    Hong Kong
    CNN
     — 

    China has banned US chip maker Micron from selling to Chinese companies working on key infrastructure projects, in a major escalation of an ongoing battle between the world’s top two economies over access to crucial technology.

    The Cyberspace Administration of China (CAC) announced the decision on Sunday, saying the US chip maker had failed to pass a cybersecurity review. The news came shortly after the close of the Group of Seven (G7) summit in Hiroshima, Japan, where leaders of major democracies spoke in one voice on their growing concerns over China.

    “The review found that Micron’s products have relatively serious cybersecurity risks, which pose significant security risks to China’s critical information infrastructure supply chain and would affect national security,” the Chinese regulator said in a statement.

    As a result, operators involved in domestic critical information infrastructure projects should stop purchasing products from Micron, it said.

    Shares of Micron Technology

    (MU)     sank about 3% Monday. Its Asian rivals had finished the day higher. Shares of Chinese memory chip maker Ingenic Semiconductor jumped 2.8%. Shenzhen Techwinsemi Technology surged 6.3%. Toyou Feiji Electronics soared 14%. In Seoul, SK Hynix, one of the world’s largest memory chip makers, gained 0.9%, outperforming the South Korean market.

    The Chinese regulator’s decision came seven weeks after it kicked off a cybersecurity review of Micron’s products, in apparent retaliation against sanctions imposed by Washington and its allies on China’s chip sector.

    Micron is one of the largest memory chip makers in the United States. It derives more than 10% of its revenue from mainland China.

    The company told CNN that it had received the regulator’s notice and was assessing its next steps.

    “We look forward to continuing to engage in discussions with Chinese authorities,” it said in a statement.

    Micron’s chief financial officer, Mark Murphy, said separately on Monday that the company was unclear what security concerns Beijing had. He said the company is evaluating what portion of its sales could be impacted.

    “We are currently estimating a range of impact in the low single digits percent of our company total revenue at the low end and high single-digit percentage of total company revenue at the high end,” he said at a conference.

    The US Commerce Department said it firmly opposed the restrictions that “have no basis in fact,” according to Reuters.

    “This action, along with recent raids and targeting of other American firms, is inconsistent with [China’s] assertions that it is opening its markets and committed to a transparent regulatory framework,” it was quoted as saying.

    The US State Department similarly said it has “very serious concerns” about the ban.

    “The Department of Commerce is engaging directly with the PRC to make our view clear, and broadly, this action appears inconsistent with the PRC’s assertions that it is open for business and committed to a transparent regulatory framework,” US State Department spokesperson Matthew Miller said Monday.

    On Sunday, China’s Foreign Ministry accused G7 leaders of “hindering international peace” and said the group needed to “reflect on its behavior and change course.”

    In a landmark joint communique Saturday, G7 member countries had made the group’s most detailed articulation of a shared position on China to date — stressing the need to cooperate with the world’s second-largest economy, but also to counter its “malign practices” and “coercion.” in a landmark joint communique Saturday.

    Since October 2022, Washington has imposed sweeping export curbs on advanced chips and chip-making equipment to China, in an attempt to cut off China’s access to critical technology for military purposes.

    In March, Japan and the Netherlands, both key US allies, also announced restrictions on overseas sales of chip-making technology to countries including China. China has strongly criticized the restrictions, labeling them “discriminatory containment” directed at the country.

    Chips are at the center of Beijing’s bid to become a tech superpower. China has its own chip manufacturers, but they supply mostly low- to mid-end processors used in home appliances and electric vehicles.

    The semiconductor battle is part of a growing divide between the United States and China. In recent years, relations between the two have reached their lowest level in decades.

    Tensions escalated this year after a suspected Chinese spy balloon was shot down by US fighter jets in February and Beijing continued to deepen its ties with Russia despite its continued invasion of Ukraine.

    However, US President Joe Biden said on Sunday that he expected ties between the two countries to improve soon.

    “I think you are gonna see that begin to thaw very shortly,” Biden told a news conference at the end of the Group of Seven summit in Japan.

    He said he had agreed with Chinese President Xi Jinping in November to keep communications open, but that everything changed after a “silly balloon that was carrying two freight cars worth of spying equipment” was shot down.

    “We are not looking to decouple from China,” he said. “We are looking to de-risk and diversify our relationship with China.”

    — CNN’s Simone McCarthy, Jennifer Hansler and Saba Haroon contributed to this report

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  • TSMC confirms supplier data breach following ransom demand by Russian-speaking cybercriminal group | CNN Business

    TSMC confirms supplier data breach following ransom demand by Russian-speaking cybercriminal group | CNN Business

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    CNN
     — 

    Taiwanese semiconductor giant TSMC confirmed Friday that one of its hardware suppliers was hacked and had data stolen from it, but said the incident had no impact on business operations.

    Confirmation of the breach came after Russian-speaking cybercriminals claimed TSMC as a victim on Thursday and demanded an extraordinary $70 million ransom from the semiconductor firm.

    There were no signs that TSMC or the hardware supplier, Taiwanese firm Kinmax, had any plans to pay the hackers (representatives from both companies didn’t respond to CNN’s questions about any ransom).

    TSMC — one of the world’s largest chipmakers and a key supplier to Apple

    (AAPL)     — was quick to assure investors and the public that the hack had no impact on its operations and that it did not compromise its customers’ data.

    “After the incident, TSMC has immediately terminated its data exchange with this concerned supplier in accordance with the Company’s security protocols and standard operating procedures,” TSMC said in a statement to CNN.

    The hackers accessed Kinmax’s internal “testing environment” for the technology it prepares to deliver to customers, Kinmax said in a statement distributed by TSMC.

    “The leaked content mainly consisted of system installation preparation that the Company provided to our customers as default configurations,” Kinmax said. The company apologized to customers whose names may show up in the leaked data.

    Ransomware groups are known to exaggerate the value of the data they steal and make outlandish demands that are never met.

    LockBit is the name of the group claiming responsibility for the hack of the TSMC supplier and the type of ransomware they use. LockBit ransomware was the most deployed ransomware around the world in 2022, according to US cybersecurity officials.

    Jon DiMaggio, an executive at security firm Analyst1 who has studied LockBit extensively, said the hackers will likely publish the stolen data or sell it if TSMC refuses to negotiate a ransom.

    For years, American officials and Taiwanese cybersecurity experts have looked to fortify the island’s infrastructure in the face of hacking threats.

    Taiwan’s chip industry is critical to the global hardware supply chain, making any potentially impactful cyberattacks on it a concern for government officials and business executives around the world.

    While the TSMC-related hacking incident doesn’t appear to have been impactful, a separate ransomware attack in 2020 on Taiwan’s state-run energy company temporarily disrupted some customers’ ability to pay for gas with company cards, according to local media reports at the time.

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  • Tim Cook and Bob Iger to meet with House China committee members | CNN Business

    Tim Cook and Bob Iger to meet with House China committee members | CNN Business

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    Washington
    CNN
     — 

    Members of a House panel focused on US-China competition are set to meet with leaders from Silicon Valley and Hollywood during a multi-day tour of California beginning today, according to a source close to the committee.

    The House Select Committee on the Chinese Communist Party plan to meet with top execs from Google, Microsoft, Apple and Disney, among others, to discuss topics ranging from China’s investments in artificial intelligence to its cultural and human rights record; its impact on supply chains; and its goals for defense and other emerging technologies, the source said.

    “We’re going to learn and share our concerns and views on the geopolitics at play here, and what we understand the CCP’s broader ambitions to be,” the source said.

    The 10-member bipartisan congressional delegation led by Chairman Mike Gallagher, a Wisconsin Republican, will kick things off Wednesday in a meeting with Disney CEO Bob Iger, where lawmakers are expected to raise concerns about Disney’s compliance with China’s censorship regime.

    Lawmakers will also dine with entertainment producers and screenwriters who have been critical of the industry’s approach to wooing Chinese viewers, the source said.

    On Thursday, lawmakers will engage with officials from Big Tech and venture capital, the source said. Microsoft President Brad Smith will speak to members about China’s control of rare earth minerals, a key input in many modern computing technologies, while experts from Stanford University are set to discuss innovation in the defense field. The group is expected to lunch with Big Tech executives representing Google, Microsoft, Palantir and Scale AI.

    On Friday, lawmakers will have conversations with former Defense Secretary James Mattis as well as Apple CEO Tim Cook. China is Apple’s third-largest geographic business segment after the Americas and Europe, accounting for more than $74 billion in company revenues last year. Apple’s revenue from China grew by 70% between 2020 and 2021, according to its financial reports.

    The meetings will also include a session on China’s role in the digital currency space and talks with members of the cryptocurrency community based in California, the source added.

    The breadth of subjects covered on the tour highlight the range of challenges the Chinese government poses to US leadership, the source said, adding that lawmakers will seek to deliver the message to business that excessive dependence on China — whether for supplies, or as a base of potential customers — exposes the US to risk.

    “This committee was set up to build out the bipartisan consensus on the CCP and the actions we need to take to defend ourselves,” the source said. “[The goal is to] make them aware of what’s happening so they can equip themselves as appropriate.”

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  • China to clamp down on AirDrop and Bluetooth file sharing for national security reasons | CNN Business

    China to clamp down on AirDrop and Bluetooth file sharing for national security reasons | CNN Business

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    Hong Kong
    CNN
     — 

    China’s cyberspace regulator plans to issue new rules clamping down on the use of wireless file sharing functions such as Bluetooth and Apple’s AirDrop on national security grounds.

    The move comes after protesters in China used AirDrop during anti-government protests in October 2022 to share content, bypassing strict internet censorship. Weeks later, Apple moved to limit the use of the AirDrop function on devices in China.

    The draft proposal was issued earlier this week by the Cyberspace Administration of China, the powerful internet watchdog that reports to a body headed by leader Xi Jinping.

    The aim of the regulation is to “maintain national security and social public interests” by regulating the use of close-range wireless communication tools such as Bluetooth, Wi-Fi and other technologies, it said.

    People must not publish or share “illegal or harmful” information on such networks and should report violations to the regulator. Those who create or support such networks should require users to provide their real names and other personal information.

    The draft says service providers should conduct security assessments when launching any new apps or functions that are capable of “mobilizing the public” or enabling “public expression.”

    The regulator is seeking public feedback on the proposed rules until July 6.

    Other than AirDrop, Google’s Nearby Share allows users to transfer data between Android and Chrome OS devices via Bluetooth and Wi-Fi. Chinese phone makers Xiaomi, Vivo and Oppo also offer similar services.

    Last year, international media, including The New York Times and Vice World News, reported that some residents in China were using AirDrop to spread leaflets and images echoing slogans used in a rare protest against Xi on October 13. On that day, shortly before Xi secured a precedent-breaking third term, two banners were hung on an overpass of a major thoroughfare in the northwest of Beijing, protesting against Xi’s zero-Covid policy and authoritarian rule.

    And in 2019, AirDrop, which is effective only over short distances, was particularly popular among anti-government demonstrators in Hong Kong who regularly used the feature to drop colorful posters and artwork to subway passengers urging them to take part in protests.

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  • Japan joins the US and Europe in chipmaking curbs on China | CNN Business

    Japan joins the US and Europe in chipmaking curbs on China | CNN Business

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    Hong Kong/Tokyo
    CNN
     — 

    Japan will restrict the overseas sale of chip manufacturing equipment, joining the United States and the Netherlands in curbing the export of key technology to China.

    The country announced Friday it would tighten exports of 23 types of advanced semiconductor manufacturing equipment.

    The rules will take effect in July, according to Japan’s minister of economy, trade and industry, Yasutoshi Nishimura.

    The ministry said it would require stricter procedures to export to about 160 destinations such as China, while 42 territories — including the United States, South Korea and Taiwan — are recognized by Japan as having adequate export controls in place.

    All exports to countries not formally recognized will now require approval from the Japanese trade ministry, it added.

    At a press conference, Nishimura said the new measures were aimed at preventing the equipment from being diverted for military use.

    “We will fulfill our responsibilities in the international community as a technology-owning country and contribute to maintaining international peace and security,” he told reporters.

    The restrictions are not aimed at a specific country, the trade ministry told CNN on Friday.

    But they follow a series of curbs enacted in recent months to clamp down on sales of chipmaking equipment to China as part of a coordinated international effort led by Washington.

    In October, the United States banned Chinese companies from buying advanced chips and chipmaking equipment without a license. It also restricted the ability of American citizens to provide support for the development or production of chips at certain facilities in China.

    Earlier this month, the Netherlands also unveiled new restrictions on overseas sales of semiconductor technology, citing the need to protect national security.

    Japan has been involved in three-way discussions with both countries, a source familiar with the talks previously told CNN.

    China has strongly criticized restrictions on tech exports, saying earlier this month that it “firmly opposes” such measures.

    Mao Ning, a Chinese foreign ministry spokesperson, also hit back at the latest move from Japan.

    “Weaponizing economic, trade and technology issues to deliberately destabilize the global industry chain will only harm others and harm oneself,” she said at a Friday news briefing.

    Japan is home to several chipmaking equipment producers, including Nikon

    (NINOY)     and Tokyo Electron. The companies’ shares in Tokyo were little changed on Friday.

    Nikon and Tokyo Electron declined to comment.

    In recent reports to clients, Jefferies analysts had assessed the potential consequences of Japanese export controls to China, noting that Nikon did “not anticipate a major impact.”

    For Tokyo Electron, the tightening is also “unlikely to have much additional impact as long as they do not go further than the US sanctions,” they added.

    — Mengchen Zhang contributed to this report.

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  • Tesla smashed it last quarter but China’s BYD did even better | CNN Business

    Tesla smashed it last quarter but China’s BYD did even better | CNN Business

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    Hong Kong
    CNN
     — 

    BYD outpaced Tesla in the second quarter as the Chinese carmaker posted record sales of hybrid and electric vehicles.

    Between April and June, BYD

    (BYDDF)     sold more than 700,000 vehicles, almost double the number sold in the same quarter last year and setting a new quarterly record.

    On Sunday, Tesla

    (TSLA)     announced it had achieved its best quarterly results. The company produced nearly 480,000 vehicles and delivered over 466,000.

    In June, BYD, which is backed by Warren Buffett, sold a total of 253,046 new energy vehicles, up 89% from a year ago, according to a company filing released Sunday. It was the best monthly sales it has ever achieved. New energy vehicles include both battery powered EVs and plug-in hybrids.

    Tesla and BYD are among the bestselling EV makers in the world. BYD still lags behind Tesla globally in terms of pure EV sales. But in China, the Shenzhen-based company has raced ahead as the top brand.

    In May, BYD sold around 119,000 pure EVs, more than double from the same period last year.

    In comparison, Tesla’s Shanghai Gigafactory delivered 77,695 vehicles in May, up 142% from a year ago, according to the most recent statistics released by the China Association of Automobile Manufacturers.

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  • Arkansas sues TikTok, ByteDance and Meta over mental health claims | CNN Business

    Arkansas sues TikTok, ByteDance and Meta over mental health claims | CNN Business

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    Washington
    CNN
     — 

    The state of Arkansas has sued TikTok, its parent ByteDance, and Facebook-parent Meta over claims the companies’ products are harmful to users, in the latest effort by public officials to take social media companies to court over mental-health and privacy concerns.

    All three lawsuits claim the companies have violated the state’s Deceptive Trade Practices Act, and seek millions, if not billions, in potential fines. The suits were filed in Arkansas state court.

    The complaints come amid mounting pressure in Washington on TikTok for its ties to China and as states have grown more aggressive in suing tech companies broadly, particularly on mental health claims. Suits by school districts or county officials in California, Florida, New Jersey, Pennsylvania and Washington state have targeted multiple social media platforms over addiction allegations.

    The suit against Meta particularly zeroes in on the company’s impact to young users’ mental health, alleging that Meta’s implementation of like buttons, photo tagging, an unending news feed and other features are addictive and “intended to manipulate users’ brains by triggering the release of dopamine.”

    In a statement, Meta’s global head of safety, Antigone Davis, said the company has invested in “technology that finds and removes content related to suicide, self-injury or eating disorders before anyone reports it to us.”

    “We want to reassure every parent that we have their interests at heart in the work we’re doing to provide teens with safe, supportive experiences online,” Davis said in the statement. “These are complex issues, but we will continue working with parents, experts and regulators such as the state attorneys general to develop new tools, features and policies that meet the needs of teens and their families.”

    The remaining two suits, both naming ByteDance and TikTok as defendants, target TikTok’s alleged shortcomings in content moderation and also reiterate claims about TikTok’s alleged threat to US national security.

    The first suit alleges that TikTok has misled users by identifying its app as suitable for teens on app stores because of the “abundant” presence of content showing profanity, substance use and nudity. The suit further alleges that TikTok’s Chinese sister app, Douyin, does not make such content available within China.

    “TikTok poses known risks to young teens that TikTok’s parent company itself finds inappropriate for Chinese users who are the same age,” the complaint said. “Yet TikTok pushes salacious and other mature content to all young U.S. users age 13 and up.”

    The second suit against ByteDance and TikTok accuse the companies of having made misleading statements about the reach of Chinese government officials and their purported inability to access TikTok user data. TikTok has migrated US user data to servers operated by the American tech giant Oracle and has established organizational controls intended to prevent unauthorized data access. But, the suit alleges, that does not mean the data is necessarily protected.

    “Neither TikTok’s data storage practices, nor its data security practices, negate the applicability of Chinese law to that data or to the individuals and entities who are subject to Chinese law and have access to that data, or the risk of access by the Chinese Government or Communist Party,” the complaint said.

    The suit also claims TikTok has misrepresented its approach to privacy and security by omitting the potential risks of Chinese government access from its privacy policies and in its statements to app store operators.

    TikTok and ByteDance didn’t immediately respond to a request for comment.

    In a statement announcing the lawsuits, Arkansas Gov. Sarah Huckabee Sanders said the suits reflect a “failed status quo.”

    “We have to hold Big Tech companies accountable for pushing addictive platforms on our kids and exposing them to a world of inappropriate, damaging content,” Sanders said. “These actions are a long time coming. We have watched over the past decade as one social media company after another has exploited our kids for profit and escaped government oversight.”

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  • ‘Too good to be true?’ As Shein and Temu take off, so does the scrutiny | CNN Business

    ‘Too good to be true?’ As Shein and Temu take off, so does the scrutiny | CNN Business

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    Hong Kong/New York
    CNN
     — 

    Temu and Shein are taking off in the United States, topping app stores and creating a frenzy with consumers.

    But as the two online shopping platforms become hugely popular, they’re also facing questions over a litany of issues, including how they’re able to sell goods at such strikingly low prices, how transparent they are with the public and how much environmental waste their businesses generate.

    Some of those questions aren’t unique to the two companies: Longtime fast-fashion producers like Zara or H&M

    (HNNMY)     have faced similar concerns.

    But in recent weeks, Temu and Shein have also faced greater scrutiny over their ties to China, the country where their businesses originated and where they continue to rely on manufacturers.

    Shein was started in China, while Temu was launched by a Chinese company that now bills itself as a multinational firm. They are based in Singapore and Boston, respectively.

    That may matter little to policymakers. As US-China tensions remain high, American legislators have increased attempts to restrict technology linked in any way to foreign entities.

    Earlier this month, a US congressional commission called out Shein and Temu in a report that suggested the companies and others in China were potentially linked to the use of forced labor, exploitation of trade loopholes, product safety hazards or intellectual property theft.

    Both firms have enjoyed major success in the United States, noted Nicholas Kaufman, a policy analyst for the US-China Economic and Security Review Commission. This “has encouraged both established Chinese e-commerce platforms and startups to copy their model, posing risks and challenges to US regulations, laws, and principles of market access,” he wrote.

    Temu and Shein have racked up tens of millions of US users

    Shein: 24.5 millionTemu: 22.8 million

  • Note: US monthly active users, as of April 19
  • Source: Sensor Tower, a market intelligence firm

“Like Shein, Temu’s success raises flags about its business practices,” Kaufman added.

Asked about the report, Shein said in a statement that it “takes visibility across our supply chain seriously.”

“For over a decade, we have been providing customers with on-demand and affordable fashion, beauty, and lifestyle products, lawfully and with full respect for the communities we serve,” a spokesperson said.

Temu did not respond to a request for comment.

Temu and Shein have taken the world’s largest retail market — the United States — by storm.

Temu, which runs a marketplace for virtually everything from home goods to apparel to electronics, was launched by PDD Holdings

(PDD) last year. It has quickly become the most downloaded app in the United States, and continues to expand its user base.

PDD was founded in China but recently began billing itself as a Cayman Islands company, citing a new corporate registration there. As of a February regulatory filing, PDD’s head office was in Shanghai. Temu says it doesn’t operate in China.

PDD also owns Pinduoduo, a hugely popular Chinese e-commerce giant that was found in a recent CNN investigation to have the ability to spy on its users.

According to cybersecurity researchers, Pinduoduo can circumvent users’ mobile security to see what they’re doing on other apps, read their messages and even change settings.

While Temu has not been implicated, the allegations about its sister company have invited further scrutiny and were cited in the Congress report on Temu this month. PDD did not respond to CNN’s multiple requests for comment on the investigation.

Shein, which was founded by Chinese entrepreneur Chris Xu, has enjoyed similar success with its app over the last few years. The company initially created a cult following for its fast-fashion apparel and has since branched out into other offerings, such as home goods.

Both companies have gained traction stateside by offering extreme bargains to shoppers, many of whom continue to feel the squeeze from historically high inflation.

A shopper at a Shein pop-up store in New York last October. The company initially created a cult following for its fast-fashion apparel, and has since branched out into other offerings.

“The timing is very advantageous,” said Michael Felice, an associate partner in Kearney’s communications, media and technology practice. “You have extreme pressure on the consumer wallet right now.”

While Temu and Shein may appear similar, they have different business models.

Temu operates as an online store, carrying merchandise from independent sellers. Shein, on the other hand, commissions its own goods through manufacturers it teams up with in what is effectively seen as a supersonic version of fast fashion.

For some consumers, the companies’ low prices have raised eyebrows.

“I think transparency and traceability of product is becoming more important,” said Felice. “When you’re starting to see price points that almost could be too good to be true, you start to ask yourself, ‘Is that too good to be true?’”

Felice also said there was a risk of Temu facing resistance from US consumers as a cross-border business.

“There’s a rising sense of nationalism in markets,” he said. “It will be interesting to see which one wins as the dual pressures of inflation and nationalism take hold on American consumers.”

Lawmakers are also getting more hawkish. While both Temu and Shein have taken steps to separate their businesses from links to China, geopolitical tensions are proving hard to shake off.

Last month, a bipartisan group of US senators introduced legislation that would give the government new powers, including a ban on foreign-linked producers of software.

In a fact sheet distributed by lawmakers, Temu’s surge on US app stores was described as an example of how Chinese consumer technology was becoming more popular.

A screenshot from Temu's commercial unveiled during the Super Bowl in February, encouraging consumers to

“From the history of the companies to where their products come from, it’s very hard to say you’re not related to China,” said Sheng Lu, an associate professor of fashion and apparel studies at the University of Delaware.

Similar to TikTok, which faces the prospect of a US ban, Lu believes that Temu and Shein could face data privacy concerns from regulators.

“They’re large, influential and collect data,” he said. “This can make the companies a potential sensitive topic.”

The fashion industry is responsible for 10% of annual global carbon emissions, more than all international flights and maritime shipping combined, according to the United Nations Environment Programme. Around 85% of clothing ends up in landfills or is burned.

Experts say the problem is even worse with fast fashion, defined as the rapid design and production of cheap and low-quality goods that respond to fleeting trends.

These are “disposable fashion companies,” said Maxine Bédat, founder of the New Standard Institute.

“That’s the crux of what they are. This stuff is not meant to last in your wardrobe,” she added. “Their business wouldn’t function if it did.”

Shein argues that its business model enables it to reduce waste and overproduction by producing small batches and only responding with larger production if demand is shown. The company has set a goal of reducing emissions by 25% by 2030, based on 2021 figures.

A model trying on outfits in Temu's Super Bowl ad. The company runs a marketplace for virtually everything, from apparel to home goods to electronics.

Temu, which markets itself more as a general store than a fashion outlet, also said its model limits unsold inventory and waste by better matching demand with supply.

The company told CNN it offsets emissions for every order with “carbon credits which support wildlife conservation efforts” in the United States, though it did not provide details.

Researchers who study textile waste and sustainability in global supply chains say the companies need to go further.

Shein, for example, often uses low-cost fabrics that are hard to recycle. Compared with other fashion retailers, the company has a much lower percentage of products that mention using sustainable or recycled textile materials, said Lu.

There are also concerns about the conditions of workers who make some of the companies’ products.

In February, a bipartisan group of US senators wrote to Shein, pressing the company on its supply chain practices and calling for greater transparency in its supply chain.

“We are concerned that American consumers may be inadvertently purchasing apparel made in part with cotton grown, picked, and processed using forced labor,” the senators said.

The inquiry was made following a Bloomberg report showing lab testing on two occasions last year found that garments shipped to the United States by Shein were made with cotton from Xinjiang. Washington has banned all imports from the Chinese region over concerns of forced labor.

In a statement to CNN, Shein said it was committed to respecting human rights and adhering to laws and regulations in the countries where it operates. A spokesperson said the company had zero tolerance for forced labor, and worked with third parties to audit supplier factories.

To ensure compliance with US laws, Shein requires that suppliers purchase cotton from approved countries, and has built tracing systems to get visibility into the origins of cotton it uses, the spokesperson added.

Temu has not faced such questions, though its sister company received backlash in 2021 over allegations that it overworks its staff. Pinduoduo said at the time that it would provide counseling following the suicide of a worker.

Worker rights at Shein also made headlines in December, when a documentary by UK broadcaster Channel 4 alleged exploitation at two Chinese factories belonging to its suppliers.

The program claimed staff were working 18 hours a day, making the equivalent of pennies on each item. CNN has not independently verified the allegations.

Shein responded to the claims, saying independent audits had refuted most of the allegations. But it conceded that the investigation had showed workers at two of its suppliers were working longer hours than allowed.

The company has since reduced the size of its orders from those producers on an interim basis, and committed $15 million to upgrade hundreds of its partner factories.

Still, the “working conditions of workers making Shein’s products remain a black box,” said Lu, the University of Delaware professor.

“Shein should be more transparent about their factory conditions and workers’ well-being.”

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  • Yellen set to travel to Beijing as part of ongoing efforts to stabilize relationship with China | CNN Politics

    Yellen set to travel to Beijing as part of ongoing efforts to stabilize relationship with China | CNN Politics

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    CNN
     — 

    Treasury Secretary Janet Yellen will travel to Beijing later this week as part of ongoing efforts by the Biden administration to deepen communication between the US and China after what has been a particularly fraught and unstable time, the Treasury Department announced Sunday evening.

    Yellen will be the second Cabinet-level member to travel to China in the last month. And although the visit will mark another high-level engagement between the two superpowers, no “significant breakthroughs” are expected, with the conversations over her three-day trip expected to be “constructive” and “frank,” according to a senior Treasury official. Yellen is not expected to meet with Chinese President Xi Jinping, according to the official.

    Her trip comes after President Joe Biden compared China’s leader to “dictators” at a political fundraiser last month – remarks that threatened to destabilize ties roughly one day after Secretary of State Antony Blinken had said his recent trip had yielded “progress” in repairing the fractured relationship between Washington and Beijing.

    Yellen is expected to meet with senior Chinese officials as well as leading US firms. She will discuss “areas of concern,” like documented allegations of human rights abuses and ways to responsibly manage competition between the two powers, as well as areas where they can work together on global challenges like climate change, the official said.

    The trip is the first face-to-face meeting between Yellen and her Chinese counterpart since a new economic team took over in Beijing, the official said, adding it will give them the opportunity to make “serious connections.”

    Along with other US officials, Yellen has long signaled the Biden administration’s desire to deepen communication and lower the temperature between the world’s top two economies.

    In testimony before Congress in April, Yellen stressed the importance of maintaining ties with China and said that “decoupling would be a big mistake,” though she noted that human rights abuses in China and questionable trade policies must be “addressed.” In June, she

    told a group     of top American CEOs that it is critical for the US to work with China on specific and urgent global challenges.

    As US officials increase the frequency of their contacts with Chinese counterparts, Biden has said he hopes to meet with Xi soon.

    “I’m hoping that over the next several months, I’ll be meeting with Xi again, talking about legitimate differences we have but also how there’s areas we can get along,” Biden told reporters in June.

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  • Blinken says US is ‘working to put some stability’ into relationship with China | CNN Politics

    Blinken says US is ‘working to put some stability’ into relationship with China | CNN Politics

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    CNN
     — 

    US Secretary of State Antony Blinken told CNN that the US is attempting to strengthen “lines of communication” with China to avoid conflict between the two superpowers.

    “We are working to put some stability into the relationship, to put a floor under the relationship, to make sure that the competition that we’re in doesn’t veer into conflict,” Blinken told CNN’s Fareed Zakaria in an interview that aired Sunday. A conflict, the secretary added, “would not be in our interest, their interest, or anyone else’s.”

    Blinken, who was speaking on the sidelines of the Aspen Security Forum in Colorado, made a highly anticipated trip to China last month, becoming the first secretary of state to travel to the country in five years and the most senior US official to make such a mission since President Joe Biden took office in 2021. His visit was followed by similar trips by other high-level Biden administration officials, including Treasury Secretary Janet Yellen and US climate envoy John Kerry.

    “We weren’t doing a lot of talking before. Now we are. We have different groups that are engaged, or about to engage, on discrete issues … that are problems … in the relationship where I believe we can, I think, get to a resolution,” Blinken said. “Now these are early days. The proof will be in the results.”

    After days of talks with senior Chinese officials in Beijing, Blinken touted that “progress” had been made toward steering relations back on track.

    The two global powers have been increasingly at loggerheads over a host of issues ranging from Beijing’s close ties with Moscow to American efforts to limit the sale of advanced technologies to China.

    Earlier this year, a Chinese surveillance balloon that was detected floating across the US and hovering over sensitive military sites before ultimately being shot down by an American fighter plane sent relations plunging to a new low and resulted in Blinken scrapping an earlier Beijing visit.

    “I was very clear with my Chinese counterparts,” Blinken told Zakaria, referring to his trip last month. “We will continue to do and say things that China will not like just as they’re going to continue to do and say things we won’t like.”

    “The test for us is whether we can manage our way through that, to make sure that we sustain these lines of communication, that we continue to talk, and that we work on, as I said, both dealing with the differences and seeing if we can cooperate,” the secretary said.

    CNN previously reported that one of the key issues that did not get resolved during Blinken’s trip was the restoration of military-to-military communications between US and China. Contacts between the countries’ top military officials remain frozen, and Chinese Defense Minister Li Shangfu continues to be under US sanction dating back to 2018 over the purchase of Russian weapons by China’s Equipment Development Department, which Li was in charge of at the time.

    Asked by Zakaria whether the US should lift the penalty to alleviate tensions, Blinken said, “Those sanctions don’t prevent the minister from engaging or us engaging with him,” adding that “it is a political decision, in effect, for China to decide whether or not he should be engaging.”

    China rejected a meeting between US Defense Secretary Lloyd Austin and Shangfu during a security forum in Singapore earlier this year, although the two did speak briefly.

    “We’ve made very clear that we think it’s a responsibility to have these military-to-military contacts, to have this dialogue, especially to avoid any miscalculations, any misperceptions of what we’re each doing,” Blinken said. “So, we’ll see where China comes out on this.”

    On the Ukraine front, Blinken told Zakaria that Russia has “already lost” the war “in terms of what Russia sought to achieve and what (Vladimir) Putin sought to achieve.”

    “The objective was to erase Ukraine from the map, to eliminate its independence, its sovereignty, to subsume it into Russia. That failed a long time ago,” the secretary said.

    Blinken acknowledged that Ukraine’s mission to regain territory captured by Moscow would be “a very hard fight.” He predicted that the counteroffensive against Russia would continue for “several months.”

    However, he said, along with the aid, military equipment and training Ukraine is receiving from various countries, Kyiv’s cause represents “the decisive element.”

    “Unlike the Russians, Ukrainians are fighting for their land, for their future, for their country, for their freedom,” Blinken said.

    CORRECTION: This story has been updated to reflect that Blinken’s prediction about a conflict continuing for “several months” was a reference to the Ukrainian counteroffensive.

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  • TikTok is owned by a Chinese company. So why doesn’t it exist there? | CNN Business

    TikTok is owned by a Chinese company. So why doesn’t it exist there? | CNN Business

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    Beijing
    CNN
     — 

    TikTok is fighting to stay alive in the United States as pressure builds in Washington to ban the app if its Chinese owners don’t sell the company.

    But the wildly popular platform, developed with homegrown Chinese technology, isn’t accessible in China. In fact, it’s never existed there. Instead, there’s a different version of TikTok — a sister app called Douyin.

    Both are owned by Beijing-based parent company ByteDance, but Douyin launched before TikTok and became a viral sensation in China. Its powerful algorithm became the foundation for TikTok and is key to its global success.

    But the two platforms, similar on the surface, play by starkly different rules.

    Here’s what you need to know about Douyin and ByteDance:

    Douyin has a whopping 600 million users a day. Like TikTok, it’s a short-form video app.

    Launched in 2016, Douyin was the major money spinner for ByteDance years before TikTok, raking in revenue through in-app tipping and livestreaming.

    ByteDance was founded by Zhang Yiming, a former Microsoft employee, and first became known for its news app Jinri Toutiao or “Today’s Headlines,” which debuted in 2012 soon after the company was founded.

    Toutiao created customized news feeds for each user. People quickly got hooked, with users averaging more than 70 minutes a day on the platform.

    ByteDance applied a similar formula to Douyin.

    Then in 2017, the privately-owned tech company bought a US-based video startup and released TikTok as the overseas version of Douyin. It also bought popular lip syncing app musical.ly, and moved those users onto TikTok in 2018.

    The app’s popularity has since gone global. In 2021, TikTok reached more than 1 billion monthly active users around the world.

    The TikTok and Douyin interfaces look similar, but when users turn on their cameras, one difference becomes clear: Douyin has an automatic beauty filter, which smooths out skin and often changes the shape of a person’s face.

    CNN's Selina Wang takes a photo using TikTok (left) and Douyin (right). Douyin applies an automatic beauty filter.

    Women in China have long faced huge pressure to conform to beauty standards that emphasize a slim figure, large eyes, dewy skin and high cheekbones.

    There is surging demand for plastic surgery. Between 2014 and 2017, the number of people getting plastic surgery in China more than doubled. Meanwhile, beauty apps compete to create filters that show users more beautiful versions of themselves.

    While TikTok also has beauty filters, users can select them when filming. They do not launch automatically.

    A Douyin livestreamer with product details displayed on screen.

    Another major difference between TikTok and Douyin is China’s massive online shopping market.

    Livestreaming sales of products is a multibillion-dollar industry in mainland China, and was given a major boost during the pandemic.

    As of June last year, there were more than 460 million livestreaming e-commerce users in mainland China, according to the Academy of China Council for the Promotion of International Trade, a body affiliated with Beijing’s commerce ministry.

    Douyin is a major platform for livestreamers, along with Taobao, Alibaba’s

    (BABA)     eBay-like online marketplace.

    A fitness livestreamer on Douyin with products displayed on-screen.

    I
    n-app shopping is made easy: Products and discounts are displayed on-screen during livestreams, with purchases just a swipe or a click away.

    China has one of the world’s strictest censorship regimes, and Douyin must follow the rules.

    Internet watchdogs crack down regularly on online dissent and block politically sensitive information.

    When CNN searched “Tiananmen 1989” in Douyin, nothing came up.

    The Tiananmen massacre, in which Chinese troops cracked down brutally on pro-democracy protesters in Beijing, has been wiped from China’s history books. Any discussion of the event is strictly censored and controlled.

    When CNN searched the same phrase in TikTok, it yielded many results including videos of users talking about what happened and a brief Wikipedia blurb summarizing the event.

    Results are shown when

    “It’s so interesting to see this contradiction in this one company [ByteDance] with these two faces,” said Duncan Clark, chairman and founder of investment advisory BDA China.

    Another key difference: Douyin takes a much stricter line on younger users.

    Users under 14 can access only child-safe content and use the app for just 40 minutes a day and. They can’t use the app from 10 p.m. to 6 a.m.

    Douyin has restrictions in place for users under 14 years old.

    For years, China has tried to curb video game addiction and other unhealthy online habits. It announced a curfew for online gaming for minors in 2019, before outright banning online gaming during weekdays for minors.

    Even on most weekends, users under 18 are only allowed to play for three hours.

    “There’s been very much a laissez-faire attitude in the US towards content, even content targeting teenagers and vulnerable people,” said Clark. “The Chinese government has been much more leaning into regulation at early stages in the growth of Douyin, particularly protecting younger people.”

    TikTok took some similar steps earlier this month, announcing that every user under 18 will soon have their accounts default to a one-hour daily screen time limit, though teenage users will be able to turn off this new default setting.

    The download page for the TikTok app displayed on an Apple iPhone.

    TikTok is not the only Chinese-owned platform finding viral success in the United States.

    Of the top 10 most popular free apps on Apple’s

    (AAPL)    US app store, four were developed with Chinese technology.

    Besides TikTok, there’s also shopping app Temu, fast fashion retailer Shein and video editing app CapCut, which is also owned by ByteDance.

    TikTok remains hugely popular in the United States, with more than 150 million monthly users — almost half of the country’s population.

    It remains to be seen whether TikTok can convince US lawmakers that it poses no threat — but the showdown in Washington has highlighted larger questions about security and data privacy that could see other apps come under fire.

    These apps could be next, said Clark. He said the US needs a “more sophisticated framework for regulating the big tech companies,” given the number of US investors and users on foreign platforms.

    “They need to also think about how high they’re gonna raise the bar for Chinese investment in the US, and the consequences of completely excluding four of the top ten apps,” said Clark.

    “What’s gonna replace them? And how is that going to play out? And how is that equitable to the investors in those apps versus US players?” he added. “It’s a mess.”

    — CNN’s Riley Zhang contributed reporting.

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  • Micron Technology: China probes US chip maker for cybersecurity risks as tech tension escalates | CNN Business

    Micron Technology: China probes US chip maker for cybersecurity risks as tech tension escalates | CNN Business

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    Hong Kong
    CNN
     — 

    China has launched a cybersecurity probe into Micron Technology, one of America’s largest memory chip makers, in apparent retaliation after US allies in Asia and Europe announced new restrictions on the sale of key technology to Beijing.

    The Cyberspace Administration of China (CAC) will review products sold by Micron in the country, according to a statement by the watchdog late on Friday.

    The move is aimed at “ensuring the security of key information infrastructure supply chains, preventing cybersecurity risks caused by hidden product problems, and maintaining national security,” it noted.

    It came on the same day that Japan, a US ally, said it would restrict the export of advanced chip manufacturing equipment to countries including China, following similar moves by the United States and the Netherlands.

    Washington and its allies have announced curbs on China’s semiconductor industry, which strike at the heart of Beijing’s bid to become a tech superpower.

    Last month, the Netherlands also unveiled new restrictions on overseas sales of semiconductor technology, citing the need to protect national security. In October, the United States banned Chinese companies from buying advanced chips and chipmaking equipment without a license.

    Micron told CNN it was aware of the review.

    “We are in communication with the CAC and are cooperating fully,” it said, adding that it stands by the security of its products.

    Shares in Micron sank 4.4% on Wall Street Friday following the news, the biggest drop in more than three months. Micron derives more than 10% of its revenue from China.

    In an earlier filing, the Idaho-based company had warned of such risks.

    “The Chinese government may restrict us from participating in the China market or may prevent us from competing effectively with Chinese companies,” it said last week.

    China has strongly criticized restrictions on tech exports, saying last month it “firmly opposes” such measures.

    In efforts to boost growth and job creation, Beijing is seeking to woo foreign investments as it grapples with mounting economic challenges. The newly minted premier Li Qiang and several top economic officials have been rolling out the welcome wagon for global CEOs and promising they would “provide a good environment and services.”

    But Beijing has also exerted growing pressure on foreign companies to bring them into line with its agenda.

    Last month, authorities closed the Beijing office of Mintz Group, a US corporate intelligence firm, and detained five local staff.

    Days earlier, they suspended Deloitte’s operations in Beijing for three months and imposed a fine of $31 million over alleged lapses in its work auditing a state-owned distressed debt manager.

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  • Warren Buffett gives reason for surprise sale of stake in Taiwan’s TSMC | CNN Business

    Warren Buffett gives reason for surprise sale of stake in Taiwan’s TSMC | CNN Business

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    Hong Kong
    CNN
     — 

    Warren Buffett says geopolitical tensions were “a consideration” in the decision to sell most of Berkshire Hathaway’s shares in global chip giant TSMC, which is based in Taiwan.

    The 92-year-old “Oracle of Omaha” shed light on the investment call in a Tuesday interview with Japanese news agency Nikkei. He was quoted as sayiing that TSMC was a well-managed company but that Berkshire had “better places” to deploy its capital.

    In February, Berkshire Hathaway

    (BRKA)     revealed that it had sold 86% of its shares in TSMC, which were purchased for $4.1 billion just months before.

    The quick sale was considered unusual because the billionaire is known for making longer term bets. The size of the purchase suggested that the initial purchase was most likely made personally by Buffett himself, rather than one of his portfolio managers, Reuters reported.

    TSMC is considered a national treasure in Taiwan and supplies semiconductors to tech giants including Apple

    (AAPL)     and Qualcomm

    (QCOM)    . It mass produces the most advanced semiconductors in the world, components that are vital to the smooth running of everything from smartphones to washing machines.

    The company is perceived as being so valuable to the global economy, as well as to China — which claims Taiwan as its own territory despite having never controlled it — that it is sometimes even referred to as forming part of a “silicon shield” against a potential military invasion by Beijing.

    TSMC’s presence is seen as providing a strong incentive to the West to defend Taiwan against any attempt by China to take it by force.

    This week, tensions soared across the Taiwan Strait after China simulated “joint precision strikes” on the island during a series of military exercises.

    Beijing launched the drills on Saturday, a day after Taiwan’s President Tsai Ing-wen returned from a 10-day visit to Central America and the United States where she met US House Speaker Kevin McCarthy.

    Chinese officials described the drills as “a serious warning against the Taiwan separatist forces’ collusion with external forces, and a necessary move to defend national sovereignty and territorial integrity.”

    Beijing conducted similar large-scale military exercises around Taiwan last August, after then-US House Speaker Nancy Pelosi visited the island.

    Taiwan and China have been governed separately since the end of a civil war more than seven decades ago, in which the defeated Nationalists fled to Taipei.

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  • Asian Americans are anxious about hate crimes. TikTok ban rhetoric isn’t helping | CNN Business

    Asian Americans are anxious about hate crimes. TikTok ban rhetoric isn’t helping | CNN Business

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    CNN
     — 

    Ellen Min doesn’t go to the grocery store anymore. She avoids bars and going out to eat with her friends; festivals and community events are out, too. This year, she opted not to take her kids to the local St. Patrick’s Day parade.

    Min isn’t a shut-in. She’s just a Korean American from central Pennsylvania.

    Ever since the US government shot down a Chinese spy balloon last month, Min has withdrawn from her normal routine out of a concern she or her family may become targeted in one of the hundreds of anti-Asian hate crimes the FBI now says are occurring every year. The wave of anti-Asian hate that surged with the pandemic may only get worse, Min worries, as both political parties have amplified fears about China and the threat it poses to US economic and national security.

    “You can’t avoid paying attention to the rhetoric, because it has a direct impact on our lives,” Min said.

    That rhetoric surged again this week as a hostile House committee grilled TikTok CEO Shou Chew for more than five hours on Thursday about the app’s ties to China through its parent company, ByteDance. After lawmakers repeatedly accused Chew, who is Singaporean, of working for the Chinese government and tried to associate him with the Chinese Communist Party, Vanessa Pappas, a top TikTok executive, condemned the hearing as “rooted in xenophobia.”

    Chew had taken pains to distance TikTok from China, going so far as to anglicize his name for American audiences and to play up his academic credentials — he holds degrees from University College London and Harvard Business School. But it was not enough to prevent lawmakers from blasting TikTok as “a weapon of the Chinese Communist Party” and as “the spy in Americans’ pockets,” all while mangling pronunciations of Chew’s name and the names of other officials at its parent company, ByteDance. After Chew’s testimony, Arkansas Republican Sen. Tom Cotton said the CEO should be “deported immediately” and banned from the United States, saying his defense of TikTok was “beneath contempt.”

    There are good reasons to be mistrustful of ByteDance given that it is subject to China’s extremely broad surveillance laws. (TikTok has failed to assuage concerns the Chinese government could pressure ByteDance to improperly access the data, despite a plan by TikTok to “firewall” the information.) And the Chinese government’s authoritarian approach to numerous other issues clashes with important American values, said many Asian Americans interviewed for this article.

    But they also warned that policymakers’ choice to use inflammatory speech — in some cases, language tinged with 1950s-era, Red Scare-style McCarthyism — endangers countless innocent Americans by association. Moreover, politicians’ increasingly strident tone is creating conditions for new discriminatory policies at home and the potential for even more anti-Asian violence, civil rights leaders said.

    “We are afraid that, more and more, the actions and the language of the government is premised on the assumption that just because we are Chinese or have cultural ties to China that we could be disloyal, or be spies, or be under the influence of a foreign government,” said Zhengyu Huang, president of the Committee of 100, an organization co-founded by the late architect IM Pei, the musician Yo-Yo Ma and other prominent Chinese Americans. “We want to deliver the message: Not only are we not a national security liability — we are a national security asset.”

    But as the country wrestles with China’s influence as a competitive global power, caught in the middle are tens of millions of Americans like Min who, thanks to their appearance, may now face greater suspicion or hostility than they experienced even during the pandemic, according to Asian American lawmakers, civil society groups and ordinary citizens.

    The heated rhetoric surrounding China has undergone a shift from the pandemic’s early days, when xenophobia linked to Covid-19 was unambiguous.

    At the time, Asian Americans feared an uptick in violence inspired by derogatory phrases such as “Kung-flu” and “China virus.” That language had emerged amid then-President Donald Trump’s wider criticisms of China, which had led to a damaging trade war with the country. It was against that backdrop that Trump first threatened to ban TikTok, a move some critics said was an attempt to stoke xenophobia.

    In recent years, criticism of China has significantly expanded to encompass even more aspects of the US-China relationship. Concerns about China have gone mainstream as US national security officials and lawmakers have publicly grappled with state-backed ransomware attacks and other hacking attempts. The Biden administration has sought to confront China on how the internet should be governed, and like the Trump administration, it’s now taking aim at TikTok, again.

    As that shift has occurred, criticism of China has stylistically evolved from blatant name-calling to the more clinical vocabulary of national security, allowing an undercurrent of xenophobia to lurk beneath the respectable veneer of geopolitics, civil rights leaders said.

    People rallied during a

    In January, House lawmakers stood up a new select committee specifically focused on the “strategic competition between the United States and the Chinese Communist Party.” At its first hearing, the panel’s chairman, Wisconsin Republican Rep. Mike Gallagher, said: “This is an existential struggle over what life will look like in the 21st century — and the most fundamental freedoms are at stake.”

    A week later, US intelligence officials warned that the Chinese Communist Party represents the “most consequential threat” to US global leadership. An unclassified intelligence community report released the same day said China views competition with the United States as an “epochal geopolitical shift.” (Even so, the report maintained that the “most lethal threat to US persons and interests” continues to be racially motivated extremism and violence, particularly by White supremacy groups.)

    While some policymakers have added that their issue is with the Chinese government, not the Chinese people or Asians in general, leaders of Asian descent say the caveat has too often been a footnote in debates about China and not emphasized nearly enough. Leaving it unsaid or merely implied creates room for listeners to draw bigoted conclusions, critics said.

    “That can’t be a footnote; it can’t be an afterthought,” said Charles Jung, a California employment attorney and the national coordinator for Always With Us, a nationwide memorial event to remember the 2021 Atlanta spa shootings that killed six Asian women. “I’m speaking specifically, directly to both GOP and Democratic politicians: Be mindful of the words that you use. Because the words you use can have real world impacts on the bodies of Asian American people on the streets.”

    The current climate has led to at least one US lawmaker directly questioning the loyalty of a fellow member of Congress.

    California Democratic Rep. Judy Chu, who was born in Los Angeles and is the first Chinese American elected to Congress, last month confronted baseless claims of her disloyalty from Texas Republican Rep. Lance Gooden. Gooden’s remarks were swiftly condemned by his congressional colleagues. But to Chu, the incident was an example of the way politics surrounding China, technology and national security have fueled anti-Asian sentiment.

    “Rising tensions with China have clearly led to an increase in anti-Asian xenophobia that has real consequences for our communities,” Chu told CNN.

    Concerns about xenophobia are bipartisan. Rep. Young Kim, a California Republican, told CNN there is “no question” that anti-Asian hate crimes have risen since the pandemic.

    California Democratic Rep. Judy Chu, who was born in Los Angeles and is the first Chinese American elected to Congress, last month confronted baseless claims of her disloyalty from Texas Republican Rep. Lance Gooden.

    “This is unacceptable,” said Kim. “Asian American issues are American issues, and all Americans deserve to be treated with respect. We can treat all Americans with respect and still be wary of threats posed by the Chinese Communist Party.”

    But even in discussing the Chinese government’s real, demonstrated risks to US security, the way that some Americans describe those dangers is counterproductive, needlessly provocative and historically inaccurate, said Rep. Andy Kim, a New York Democrat and a member of the House select committee. Even the name “Chinese Communist Party” can itself prime listeners to adopt a Cold War mentality — a framework whose analytical value is dubious, Kim argued.

    “A lot of my colleagues, especially on the select committee, use rhetoric like, ‘This is a new Cold War,’” said Kim. “First of all, it’s not true: The Soviet Union was a very different competitor than China. And it’s framed in a very zero-sum way … It’s very much being talked about as if their entire way of life is incompatible with ours and cannot coexist with ours, and that heightens the tension.”

    In a November op-ed, Gallagher and Florida Republican Sen. Marco Rubio directly linked that rhetoric to TikTok, calling for the app to be banned due to the United States being “locked in a new Cold War with the Chinese Communist Party, one that senior military advisers warn could turn hot over Taiwan at any time.”

    Just because China may view its dynamic with the United States as an epic struggle does not mean Americans must be goaded into doing the same, Kim argued. Beyond the violence it could trigger domestically, a stark confrontational framing could cause the United States to blunder into poor policy choices.

    For example, he said, the right mindset could mean the difference between legally fraught “whack-a-mole” attempts to ban Chinese-affiliated social media companies versus passing a historic national privacy law that safeguards Americans’ data from all prying eyes, no matter what tech company may be collecting it.

    Security researchers who have examined TikTok’s app say that the company’s invasive collection of user data is more of an indictment of lax government policies on privacy, rather than a reflection of any TikTok-specific wrongdoing or national security risk.

    “TikTok is only a product of the entire surveillance capitalism economy,” said Pellaeon Lin, a Taiwan-based researcher at the University of Toronto’s Citizen Lab. “Governments should try to better protect user information, instead of focusing on one particular app without good evidence.”

    Asked how he would advise policymakers to look at TikTok, Lin said: “What I would call for is more evidence-based policy.” Instead, some policymakers appear to have run in the opposite direction.

    Anti-China sentiment has already led to policies that risk violating Asian-Americans’ constitutional rights, several civil society groups said.

    John Yang, president of Asian Americans Advancing Justice, pointed to the Justice Department’s now-shuttered “China Initiative,” a Trump-era program intended to hunt down Chinese spies but that produced a string of discrimination complaints and case dismissals involving innocent Americans swept up in the dragnet. The Biden administration shut down the program last year.

    More recently, Yang said, proposed laws in Texas and Virginia aimed at keeping US land out of the hands of those with foreign ties would create impossible-to-satisfy tests for Asian-Americans, showing how anti-China fervor threatens to infringe on the rights of many US citizens.

    “National security has often been used as a pretext specifically against Asian-Americans,” Yang said, referring to the internment of Japanese-Americans during World War II and the racial profiling of Muslim-Americans following Sept. 11. “We should remember that many Chinese-Americans came to this country to escape the authoritarian regime of China.”

    16 TikTok app STOCK

    Though he fears the situation for Asian-Americans will get worse before it gets better, Yang and other advocates called for US policymakers to stress from the outset that their quarrel lies with the Chinese government and not with people of Chinese descent.

    “We know from experience in the United States that once you demonize Chinese people, all Asian people living in this country face the brunt of that rhetoric,” said Jung. “And you see it not just in spy balloons and the reactions surrounding it and TikTok and Huawei, but also in modern-day racist alien land laws.”

    Growing up in Pennsylvania, Min was no stranger to racially motivated violence: Her home was regularly vandalized with eggs, tomatoes and epithet-laden graffiti (“Go home, gooks”); her father once discovered a crude homemade explosive stuffed in his car.

    But fears of racism stoked by modern US political rhetoric has forced Min to change how her family lives in ways they never had to during her childhood.

    Last year, amid another spate of assaults targeting elderly Asian-Americans, Min said her mother sold the family dry-cleaning business and moved to Korea, following Min’s father who had moved the year before.

    “It was a sad reality to say that as much as we want our family close to us and their grandchildren, they will be safer in Korea,” Min said.

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  • Ron DeSantis, facing challenges at home, will test presidential ambitions overseas | CNN Politics

    Ron DeSantis, facing challenges at home, will test presidential ambitions overseas | CNN Politics

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    CNN
     — 

    After a trying week for his national political ambitions, Gov. Ron DeSantis is headed abroad this week for a series of visits to allied nations – an opportunity for the Florida Republican to step onto the international stage for the first time as a likely presidential contender.

    The official purpose behind DeSantis’ globetrotting is for an “international trade mission,” according to his office. DeSantis, as well as first lady Casey DeSantis and two representatives from his administration, will travel to Japan, South Korea, Israel and the United Kingdom to meet with officials and chat up potential business partnerships.

    “This trade mission will give us the opportunity to strengthen economic relationships and continue to demonstrate Florida’s position as an economic leader,” the governor said in a news release Thursday.

    DeSantis met with Japanese Prime Minister Fumio Kishida on Monday in Tokyo where the two exchanged views on “regional affairs.” Kishida said he hopes DeSantis’ “visit to Japan will lead to the further strengthening of Japan-US and Japan-Florida relationship,” according to a Japanese foreign ministry statement published on Monday.

    While in Israel, DeSantis will also keynote an event hosted by The Jerusalem Post and the Museum of Tolerance Jerusalem. The appearance there comes at a time of increased tension between the US and its Middle East ally over Israeli Prime Minister Benjamin Netanyahu’s judicial overhaul proposal.

    The trip will spotlight DeSantis’ foreign policy credentials as he inches toward a White House bid. DeSantis rose to the national consciousness as a pandemic contrarian and by leading his state through a series of cultural fights, but his views on world affairs had been less scrutinized until recently, when the governor offered a series of contradicting opinions on the war in Ukraine.

    DeSantis’ remark that support for Ukraine was not of “vital” national interest set off alarm bells among hawkish Republicans in Congress before the governor backtracked in an interview with Piers Morgan and called Russian President Vladimir Putin a war criminal. He further obscured his position a few days later by dismissing the war as a fight over the “borderlands.”

    Over his nearly six years as a congressman in Washington, DeSantis, a former Navy lawyer stationed in both Guantanamo Bay and Iraq, served on the House Foreign Affairs Committee, where he was often critical of President Barack Obama’s overseas agenda. As governor, he has urged hard-line policies against communist governments in Cuba and China, most recently banning TikTok on state government devices and pushing legislation that would make it illegal for Chinese nationals to buy property in Florida.

    And even as he is scheduled to meet with allies to encourage business with his state, DeSantis on Friday poked fun at a United Nations committee resolution that criticized an anti-riot law he championed as governor.

    “I wear that criticism as a badge of honor,” he said at an event hosted by The Heritage Foundation outside Washington.

    DeSantis’ trip abroad marks the first time he has left US soil on official business since the early days of his first term as governor in 2019, when he visited Israel along with the state’s elected cabinet members. As an elected official, DeSantis has not visited a foreign country other than Israel.

    DeSantis’ predecessor, now-US Sen. Rick Scott, embarked on more than a dozen trade missions during his tenure as governor. DeSantis, though, has focused largely on issues at home while also dealing with a coronavirus outbreak that significantly restricted travel for much of his first term.

    As he now prepares for his first visits to Europe and East Asia as governor, DeSantis is leaving behind the most difficult stretch so far of the unofficial rollout of his expected presidential campaign, as well as challenges in his home state that have caused critics to raise questions about his extensive recent travel.

    Some key donors have publicly expressed reservations about DeSantis’ chances in a primary against Donald Trump, who continues to hammer his onetime ally on social media. The former president last week upstaged DeSantis’ return to Capitol Hill to seek support from within the chamber he once served in by rolling out a string of congressional endorsements – including a handful from Florida lawmakers. Eleven Florida Republicans have endorsed Trump over DeSantis so far – including seven last week.

    DeSantis has also faced scrutiny for his response this month to torrential storms – described as a 1-in-1,000-year rainfall event – that left Fort Lauderdale and surrounding communities underwater. Amid the severe flooding, DeSantis took his book tour to Ohio and spoke at a fundraiser for New Hampshire Republicans – returning to Florida in between trips for a late-night, closed-door signing of a six-week abortion ban – and said little publicly about the storms.

    “Fort Lauderdale is under water and DeSantis is campaigning in Ohio right now instead of taking care of the people suffering in his state,” Donald Trump Jr., the former president’s son, tweeted earlier this month.

    The storms also caused gasoline shortages throughout South Florida, leading the state’s US senators, both Republicans, to criticize the response, though without directly calling out DeSantis. Sen. Marco Rubio called the situation “crazy,” adding, “They gotta get this thing fixed.”

    “Florida families shouldn’t have uncertainty about their next tank of gas. Every resource available should be deployed to fix this,” Scott tweeted.

    Asked about the comments from Florida’s senators, DeSantis spokesman Bryan Griffin told CNN that “the state emergency response apparatus has been at work since the flooding occurred and continues in full swing responding to the needs of the localities as they are communicated to us. The governor issued a state of emergency the day after the flooding occurred.”

    On Saturday, DeSantis requested a major disaster declaration from the Biden administration.

    Meanwhile, in his state’s capital of Tallahassee, the Florida Legislature is nearing the end of a 60-day session where GOP lawmakers have been tasked with helping DeSantis rack up policy victories before he launches a campaign for president. He has already signed several of those bills, including the abortion ban, a measure to allow Floridians to carry concealed guns in public and an overhaul of the state’s tort laws.

    With DeSantis mostly on the road, though, several of his priorities appear to have stalled in the GOP-controlled legislature. A bill that would make it easier to sue media outlets for libel hasn’t moved in weeks. State lawmakers have also balked at a provision in DeSantis’ immigration package that would eliminate in-state tuition for undocumented residents.

    US Rep. Greg Steube, who previously served in the Florida Senate and endorsed Trump last week, accused state lawmakers on Friday of “carrying the water for an unannounced presidential campaign.”

    “Your constituents voted you into those positions to represent them, not to kowtow to the presidential ambitions of a Governor!” the GOP lawmaker tweeted. “Be strong and courageous, the people of Florida will thank you.”

    Appearing unfazed by the chatter, DeSantis on Friday rattled off his conservative victories as governor before a friendly audience at the Heritage Foundation event.

    DeSantis also looked briefly ahead to the 2024 race, laying out what was at stake in the next presidential election and suggesting the country needed a “determined and disciplined chief executive to root out politicization and corruption throughout the old executive branch” – a likely jab at the distracted and often chaotic presidency of Trump.

    “We need to reject the pessimism that is in the air about our country’s future,” DeSantis said. “Because at the end of the day, decline is a choice, success is attainable and freedom is worth fighting for.”

    This story has been updated with additional details.

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  • LinkedIn to cut 716 jobs and shut its China app amid ‘challenging’ economic climate | CNN Business

    LinkedIn to cut 716 jobs and shut its China app amid ‘challenging’ economic climate | CNN Business

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    Hong Kong
    CNN
     — 

    LinkedIn, the world’s largest social media platform for professionals, is cutting 716 positions and shutting down its jobs app in mainland China, the California-based company announced.

    The decision was made amid shifts in customer behavior and slower revenue growth, CEO Ryan Roslansky said Monday in a letter to employees.

    “As we guide LinkedIn through this rapidly changing landscape, we are making changes to our Global Business Organization and our China strategy that will result in a reduction of roles for 716 employees,” he said.

    LinkedIn, owned by Microsoft

    (MSFT)    , has joined a slew of US tech companies that have made significant job cuts this year. Meta announced in March an additional 10,000 layoffs on top of mass layoffs announced in 2022. Amazon also said during the same month it would eliminate 9,000 positions, on the heels of the 18,000 roles the company announced it was cutting in January.

    “As we plan for [the fiscal year of 2024], we’re expecting the macro environment to remain challenging,” Roslansky said. “We will continue to manage our expenses as we invest in strategic growth areas.”

    As part of the move, LinkedIn will phase out InCareer, its app for mainland China, by August 9.

    Roslansky cited “fierce competition” and “a challenging macroeconomic climate” as the reason for the shutdown.

    LinkedIn will retain some presence in China, including providing services for companies operating there to hire and train employees outside the country, according to a company spokesperson.

    LinkedIn is the last major Western social media app still operating in mainland China. Twitter, Facebook and Youtube have been banned in the country for more than a decade. Google left in early 2010.

    LinkedIn first entered China in 2014 by launching a localized version of its main app. But its moves to censor posts in the country, in accordance with Chinese laws, came under criticism.

    In March 2021, LinkedIn had to suspend signups in China to ensure it was “in compliance with local law.” A few months later, it replaced that app with InCareer, which was focused solely on job postings, with no social networking features such as sharing or commenting.

    The US social media site has faced tough competition in China. By 2021, it had more than 50 million members in the country, making it the company’s third biggest market after the United States and India. But it lagged behind local competitors such as Maimai.

    Maimai was launched in 2013 and dubbed the Chinese version of LinkedIn. In a few years it surpassed LinkedIn to become the most popular professional networking platform in the country, with 110 million verified members. A major feature that powered its success was that it allowed users to post anonymously in a chat forum.

    The operating environment in China has also become more challenging. Since Xi Jinping took power in 2012, he has tightened control over what can be said online and launched a series of crackdowns on the internet.

    “While we’ve found success in helping Chinese members find jobs and economic opportunity, we have not found that same level of success in the more social aspects of sharing and staying informed,” LinkedIn wrote in an October 2021 blog post. “We’re also facing a significantly more challenging operating environment and greater compliance requirements in China.”

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  • First on CNN: New bipartisan bill in Senate could address TikTok security concerns without a ban | CNN Business

    First on CNN: New bipartisan bill in Senate could address TikTok security concerns without a ban | CNN Business

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    CNN
     — 

    Five US senators are set to reintroduce legislation Wednesday that would block companies including TikTok from transferring Americans’ personal data to countries such as China, as part of a proposed broadening of US export controls.

    The bipartisan bill led by Oregon Democratic Sen. Ron Wyden and Wyoming Republican Sen. Cynthia Lummis would, for the first time, subject exports of US data to the same type of licensing requirements that govern the sale of military and advanced technologies. It would apply to thousands of companies that rely on routinely transferring data from the United States to other jurisdictions, including data brokers and social media companies.

    The legislation comes amid a flurry of proposals to regulate how TikTok and other companies may handle the sensitive and valuable data of Americans — not just their names, email addresses and phone numbers but also potentially their behavioral data such as location information, search and browsing histories and personal interests.

    “Massive pools of Americans’ sensitive information — everything from where we go, to what we buy and what kind of health care services we receive — are for sale to buyers in China, Russia and nearly anyone with a credit card,” Wyden said in a statement. “Our bipartisan bill would turn off the tap of data to unfriendly nations, stop TikTok from sending Americans’ personal information to China, and allow nations with strong privacy protections to strengthen their relationships.”

    Lawmakers have scrutinized TikTok, in particular, for its ties to China through its parent company, ByteDance. Much of the existing legislation addressing TikTok at the federal and state level has focused on bans of the app. But Wyden’s bill subjecting US data to export licensing could address the issue without wading into the thorny legal issues surrounding a potential ban, an aide said, and simultaneously avoid giving broad new powers to the executive branch.

    Wednesday’s legislation, known as the Protecting Americans’ Data From Foreign Surveillance Act, does not identify TikTok by name. Instead, it directs the Commerce Department to maintain lists of countries that are considered trustworthy and untrustworthy for the purposes of receiving US data.

    There would be no restrictions applied to personal information transferred to trustworthy states, and no restrictions on individual internet users’ own transfers of their personal data, but companies seeking to transfer Americans’ personal information to countries outside of the trustworthy list would be required to apply for a license. Transfers to countries on the untrustworthy list would be automatically prohibited unless companies could prove they have a valid reason for a transfer, according to a copy of the bill text reviewed by CNN.

    Factors the Commerce Department would need to consider when building its lists include whether a country has enough of its own privacy safeguards — reflected in laws, regulations and norms — to prevent sensitive US data from being transferred further to one of the untrustworthy countries. Another factor includes whether a country has engaged in “hostile foreign intelligence operations, including information operations, against the United States,” language that appears to refer to China, Russia and other foreign adversaries.

    The Commerce Department would also be authorized to identify the specific types of information that would be subject to licensing requirements, based on their sensitivity, as well as how much information a company could transfer to a non-approved country before needing a license.

    A previous version of the bill was introduced last summer. The newest version, the Wyden aide said, includes fresh language that targets TikTok indirectly by prohibiting data transfers from one company to a parent company that may receive data requests by a hostile foreign government, when the company holds data on more than one million users.

    TikTok has faced criticism from US officials who say the company’s links to China pose a national security risk. TikTok has said it has never received a request for US user data from the Chinese government and would never comply with such a request.

    TikTok has also said it is working on securing US user data by storing it on servers controlled by Oracle and by establishing special US access protocols to prevent unauthorized use of the information.

    Should TikTok abide by its plan, known as Project Texas, Wednesday’s legislation would not affect the company, according to the Wyden aide, but if TikTok or ByteDance did seek to move US user data to China, then those transfers would potentially be subject to the proposed Commerce Department restrictions.

    Congress has made several attempts in recent months to address data transfers to foreign adversaries. In February, House lawmakers advanced a bill that would all but require the Biden administration to ban TikTok over national security concerns about the app. The next month, Senate lawmakers introduced a bill that would give the Commerce Department wide latitude to assess all foreign-linked technologies and to take virtually any measures, up to and including imposing a nationwide ban, to restrict their domestic use.

    Those bills have provoked a backlash from industry and civil liberties groups, as well as among some fellow lawmakers. Among the concerns are their potential impact on Americans’ First Amendment rights and a potential conflict with laws facilitating the free flow of media to and from foreign rivals. Other concerns include whether the breadth of the legislation could give the US government too much power and whether it could end up harming industries that are not the target of the legislation.

    The new bill includes language requiring more input from privacy, civil rights and civil liberties experts, said Justin Sherman, founder and CEO of the research firm Global Cyber Strategies and a senior fellow at Duke University’s Sanford School of Public Policy who has seen the bill.

    “You don’t load up Excel sheets in a shipping crate and send them to a foreign port,” Sherman said, but data transfers are a “hugely and often ignored problem in national security.”

    “We need to get beyond just looking at a couple mobile apps and platforms, and start looking at all parts of this ecosystem, including how data gets sold and transferred,” Sherman added, “and this bill takes an important look at that issue.”

    Other senators co-sponsoring Wednesday’s legislation include Rhode Island Democratic Sen. Sheldon Whitehouse, Tennessee Republican Sen. Bill Hagerty, New Mexico Democratic Sen. Martin Heinrich and Florida Republican Sen. Marco Rubio. A companion bill in the House will also be unveiled Wednesday, sponsored by Ohio Republican Rep. Warren Davidson and California Democratic Rep. Anna Eshoo.

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