China blurs lines between private and state business

China blurs lines between private and state business

This week’s revelation that a former Chinese government official worked in a key role at TikTok raises issues that reach far beyond the wildly popular short-video app itself. It helps to illuminate, more broadly, the changing status of private enterprises in China’s authoritarian state. This is of crucial importance: western businesses and governments have long treated private Chinese businesses more favourably than their state-owned cousins

The disclosure by the Financial Times that Cai Zheng — who had worked in the Chinese embassy in Tehran — had been responsible for deciding what content to allow on TikTok came after repeated denials by ByteDance, the app’s Beijing-based owner, that the Chinese government has any influence over TikTok’s operations. The news coincides with ByteDance’s efforts to forge a deal with Oracle and Walmart to avoid a US ban on TikTok. President Donald Trump has painted TikTok as a threat to national security since its user data on American people could end up in the hands of China’s government.

Western partners have generally been more relaxed towards private-sector Chinese businesses than to their state counterparts. Partly that reflects the view that state-owned corporations may enjoy access to subsidies and funding that private competitors in the west cannot match. Private companies have also largely been seen as free agents driven, like their western counterparts, by the profit motive, not Chinese Communist party orders.