China launched a mechanism that would allow it to sanction foreign companies, upping the ante in a tech war with the United States a day after Washington moved to curb popular Chinese apps TikTok and WeChat.
China's long-expected "unreliable entities list" is seen as a weapon for Beijing to retaliate against the United States, which has used its own "entity list" to shut Chinese telecom giant Huawei out of the US market, while also moving against TikTok and WeChat.
Its implementation comes just a day after the US Commerce Department stepped up the pressure by ordering a ban on downloads of video app TikTok and effectively blocking use of WeChat, the Chinese super-app.
An announcement by China's Ministry of Commerce did not mention any specific foreign entities that could be targeted.
But it said the new system would consider sanctions on entities whose activities "harm China's national sovereignty, security, and development interests" or violate "internationally accepted economic and trade rules".
That language closely tracks wording that Beijing has used to repeatedly denounce US actions against Chinese companies.
Punitive measures may include fines against the foreign entity, banning it from conducting trade and investment in China, and restrictions on the entry of personnel or equipment into the country.
It covers "foreign enterprises, other organisations and individuals", the ministry said.
'Unreliable'
Under Friday's US order against the Chinese apps, Tencent-owned WeChat would lose functionality in the United States from Sunday. TikTok users will be banned from installing updates but could keep accessing the service through November 12.
That timeframe potentially allows for a tie-up between TikTok, owned by China's ByteDance, and a US company to safeguard data for the wildly popular app to allay Washington's security concerns.
With President Donald Trump facing a tough re-election campaign, US officials have described the measures as essential to safeguard national security from potential Chinese espionage through the platforms.
But in a response to the US steps, China's Commerce Ministry on Saturday condemned what it called US "bullying", saying it violated international trade norms and that there was no evidence of any security threat.
Critics said that while the security risks are unclear, the sweeping ban raises concerns about the US government's ability to regulate free expression. Source: AAP
"If the US insists on going its own way, China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies," it said, without specifying the potential measures.
A short time after that statement, the ministry announced the new sanctions regime.
TikTok vowed to fight the Trump crackdown in court, saying it impedes a tool "for entertainment, self-expression and connection."
Tiktok users react
American TikTok users reacted with a collective shrug to the US move, with many already planning an exit to other platforms should the clampdown lead to an outright ban.
"Oh my God! Ok! It's happening! Everybody stay calm!" TikToker Nick Foster told his 577,000 followers, dubbing a video of himself with audio of actor Steve Carell's character on the series "The Office" panicking during a fire alarm.
Although young users on the platform, who make up its primary base, don't seem to have paid much attention to the government's announcement, the older ones have reacted.
"Thank you for the fun times," posted The Buyin King, a 22-year-old investor with 438,000 followers.
Some users were pragmatic, pointing out that for those who already had the app little would change between Sunday, when the government ban on downloads will go into effect, and November 12, the cutoff date set by President Donald Trump's administration.
"This is posturing," said Jeff Couret, a consultant with 376,000 TikTok followers. "For Trump it's a way of showing TikTok that he means business but without hurting them too much."
However, most of those who have built a following on TikTok are getting ready to pack their bags, regardless of the ultimate outcome.
For people who make a living off of their presence on the social network - such as star Addison Rae, who boasts 60.9 million followers and earned $5 million between June 2019 and June 2020, according to Forbes magazine - the financial stakes are high.
For weeks now, many TikTok users have been sharing their Instagram and YouTube accounts on their profiles, preparing their fans for a jump to greener pastures.
Competitors lying in wait
Even TikTok's gold standard, Charli D'Amelio - who, with 87.5 million followers at just 16 years old, is the platform's most popular creator - announced Tuesday a non-exclusive partnership with Triller, a similar platform, where she already has 1.1 million subscribers.
Bryce Hall, Nessa Barrett and Chase Hudson - largely unknown among the over-20-year-olds but with more than 10 million TikTok followers each - have also started Triller accounts.
In a sign of the times, Trump himself, who never dipped his toe into TikTok's waters, has made his debut on Triller, where he already has 953,000 followers.
In August, Triller announced it had been downloaded 250 million times since it was created, a figure that was disputed by analytics firm Apptopia, which put the number of downloads closer to 52 million.
The app is not the only one positioning itself to rise from the ashes of titan TikTok, which has been downloaded two billion times worldwide and has 100 million users in the US alone.
Also lying in wait are Byte (no relation to TikTok's parent company ByteDance), which was launched in January, as well as Likee -- which Apptopia says was downloaded 7.2 million times in the US between February and August -- and Dubsmash.
Not to mention Instagram and YouTube, which have extended their tentacles with Reels and YouTube Shorts, respectively, the test versions of which launched opportunely in the past few months.
The winner "will be the one that the loyal TikTok users perceive as being the 'cool' place to be," said James Mourey, a marketing professor at DePaul University.
In its time, TikTok itself had benefited from the January 2017 disappearance of Vine, a video-sharing app that had 200 million active users at its peak.
In the current context, "startups like Byte may have the edge, as we know established brands in tech lose their 'cool factor' the older they get," said Mourey, pointing to younger generations' migration from Facebook to Instagram.
But even weakened and suspended, TikTok isn't dead yet, Mourey warned.
A lot can still happen before November 12, "and don't forget: TikTok is not banned outside of the US, so as long as TikTok continues to be the dominant player globally, it will continue to innovate and maintain a strong customer base," he said.
