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Beijing’s grip on tech and TikTok’s woes

Hello everyone. This is Cissy from Hong Kong, but I am writing to you from a ski resort in Nagano, Japan, where I’ve had great fun on a day off.

I have to say, my trip to Tokyo for a work event this week was pretty lucky: Japan eased its mask-wearing guidance on Monday and thanks to climate change, Tokyo’s cherry blossom season officially kicked off Tuesday, 10 days earlier than usual.

I’m ready to join Japan’s nationwide celebration under the pale pink blossoms in the unusually warm weather, but Beijing, where I previously lived for 10 years, is feeling the chill after China’s National People’s Congress (NPC) concluded its annual gathering on Monday.

Before the epidemic, I used to cover the yearly gathering in person. While some people may find the NPC boring since it’s only a rubber-stamp parliament, I always enjoyed the rare opportunity to doorstep high-profile business moguls like Evergrande’s Xu Jiayin, Tencent’s Pony Ma and’s Richard Liu. You could get some interesting quotes from them if you knew how.

For journalists covering China, those were the relatively good old days. Now those times appear to be long gone. Along with the stringent quotas placed on foreign media video crews at this year’s NPC, some high-profile tech representatives — including Ma, Robin Li of Baidu, and Neil Shen of Sequoia China — have disappeared from the list of delegates.

Instead, chip researchers and engineers have become the new delegates as Beijing pushes for tech self-reliance in the face of US chip export curbs.

Beijing’s tightening grip

The Chinese Communist party believes that mobilising nationwide resources can achieve breakthroughs in a variety of areas, particularly in the tech and science fields. But that effort has spooked foreign investors, who are worried it will lead to even greater government involvement in business, writes Nikkei’s Noriyuki Doi.

From this year, China’s science and technology policy will be under the direct control of the party, according to a proposal approved by the NPC last week. That proposal fits with other recent moves to bring public security and financial oversight under party control.

In a previous study, the Bank of Japan found that, on average, Chinese state-owned businesses’ total factor productivity, which includes technical innovation, was 17 percentage points lower than that of private peers.

Foreign investors worry that excessive government interference will stifle innovation and sacrifice productivity improvement, one of the few sources of growth available as China’s population shrinks.

Undersea tensions

Chinese authorities are making it much more challenging for international companies to lay and maintain subsea internet cables in disputed parts of the South China Sea, underscoring simmering tensions over who owns and operates the infrastructure transmitting the world’s data.

The motivation for this increased scrutiny and policing? Fear that foreign companies could be using cables as a front for espionage, retaliation for being ousted from international telecommunication projects, and leverage to demand a seat at the table, write the Financial Times’ Anna Gross, Alexandra Heal, Demetri Sevastopulo, Kathrin Hille and Mercedes Ruehl.

The issue pertaining to China is twofold. Chinese authorities have been making the process for obtaining permits within their recognized territorial waters — 12 nautical miles from land — long and frustrating, according to several sources who spoke with the FT.

For example, a cable currently under construction called SJC-2, which will connect Japan to Singapore and land in Taiwan and Hong Kong, has been delayed by more than a year because of Chinese objections and lengthy permitting issues.

But Chinese authorities have also started requesting permits for work within what they claim as their “exclusive economic zone” within the South China Sea — which is often contested by other countries and runs counter to international maritime law — making efforts to lay and maintain cables in that popular stretch of water prohibitively difficult.

The result: Companies are looking to forge routes that avoid the South China Sea entirely, sources say.

TikTok’s troubles

Column chart of $mn showing ByteDance’s lobbying expenditures in the US

In recent years, TikTok and its Chinese parent ByteDance have splashed out millions of dollars on lobbyists with ties to both major American political parties to avoid being banned in the US. However, these efforts have done little to change Washington’s stance on the matter, writes Nikkei Asia’s Cissy Zhou.

The concern among US officials is that TikTok collects troves of data from tens of millions of mostly younger Americans that could be used for spying or for disseminating Beijing’s propaganda.

Although TikTok has succeeded in securing meetings with legislators and policymakers in Washington to discuss its protocols and safety measures, a TikTok executive told Nikkei that US lawmakers are only interested in being hawkish on China. Despite its recent setbacks — including an order to divest its stake in TikTok — ByteDance has not given up on America. It is still trying to make its case and avoid a ban.

Powering up

Leading European chipmaker Infineon is betting on next-generation power semiconductors to spur growth amid a downturn in the broader chip market, a senior executive told Nikkei Asia’s Cheng Ting-Fang.

Power semiconductors are used in everything from superfast phone chargers to electric vehicles, and demand for them is expected to grow rapidly, according to the company.

Infineon is particularly optimistic about gallium nitride and other advanced materials that promise greater capacity and efficiency than conventional silicon-based power chips.

As part of its bet on power chips, the company recently disclosed an $830bn deal to buy Ottawa-based chip designer GaN Systems. The company is also spending around $2bn to expand chipmaking capacity in Malaysia and Austria.

Brady Wang, a semiconductor analyst with Counterpoint Research, said there is no doubt that cutting-edge power semiconductors will be a key growth driver for the market as demand for better power supply solutions grows.

Suggested reads

  1. SoftBank, other Japanese firms move to limit ChatGPT use (Nikkei Asia)

  2. Samsung Electronics to build five new chip plants in South Korea (Nikkei Asia)

  3. Silicon Valley Bank’s China venture in doubt as start-ups struggle to access US funds (FT)

  4. Japan semiconductor distributors eye expansion in emerging markets (Nikkei Asia)

  5. Apple and Foxconn win labour reforms to advance Indian production plans (FT)

  6. US issues sanctions on Chinese companies for supplying parts in Iranian drones (FT)

  7. China battery giant CATL’s profit surges 93% on booming demand (Nikkei Asia)

  8. Chinese AI groups use cloud services to evade US chip export controls (FT)

  9. Joint patents with China pose pitfalls in US-led decoupling (Nikkei Asia)

  10. Lex: Chips/ASML: Dutch ban leaves China unequivocally unequipped (FT)

#techAsia is co-ordinated by Nikkei Asia’s Katherine Creel in Tokyo, with assistance from the FT tech desk in London.

Sign up here at Nikkei Asia to receive #techAsia each week. The editorial team can be reached at

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