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U.S.-China Tensions & TikTok – LEVICK
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U.S.-China Tensions & TikTok

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In the South China Morning Post, Richard Levick discusses the implications of US-China tensions and the sudden resignation of TikTok’s American chief executive Kevin Mayer.

The sudden resignation in late August of TikTok’s American chief executive Kevin Mayer after just three months on the job underscores the searing pressure professionals at Chinese companies are facing as US-China relations deteriorate, the Trump administration targets tech firms and election season accusations fly.

“We are in a new Cold War with China and the US,” said Richard Levick, chief executive of the Levick crisis management firm that represents Chinese clients. “And there’s lots of collateral damage.”

Mayer’s surprise departure from TikTok came amid an intense US government campaign against the social media platform – famous for short dance and music videos – including executive orders by US President Donald Trump intended to cripple its US operations and force a sale to American owners within 90 days.

The administration contends that TikTok, WeChat, Huawei and other Chinese companies could pass on sensitive information to Beijing and pose other security risks, charges the businesses deny. TikTok suitors, including Microsoft, Oracle, Twitter and Walmart, are reportedly interested in buying the privately held firm, valued by some at upwards of US$50 billion, although Beijing says it must approve any sale.

“If Kevin stayed inside Chinese-owned TikTok, it could be a career killer, especially as Trump makes China into America’s Enemy No 1,” said Gordon Feller, a former Cisco Systems executive and now a board member with Citadel Threat Management, a drone detection company in California. “I think this is going to be a big setback for a lot of American executives who’ve been hired by successful Chinese companies.”

A Silicon Valley tech investor with close China ties – who requested anonymity given growing US-China tension – said that the cleaving apart of TikTok’s US and global operations would presumably reduce Mayer’s job largely to battling Washington. “It is likely that he would spend a lot of time on legal issues, which isn’t fun,” he added.

Non-Chinese executives working for and with Chinese companies, think tanks and academia say that their jobs are increasingly stressful, unpredictable and raise concern about how “working for the enemy” will look on their résumés as ties crumble.

Levick, who has represented numerous controversial clients – from Guantanamo prison detainees after September 11 to high-profile African leaders – said he has never felt so threatened trying to do his job.

“You hang up the phone and you wonder if the phone is bugged. The doorbell rings and you wonder if the government is paying you a visit. You wonder if your computer is hacked,” said Levick, who sees this as part of a Trump administration pressure campaign.

“If it makes the lawyers, lobbyists and communication professionals feel uncomfortable in the process, so be it.”

Washington has numerous weapons to use in its showdown with Beijing. These include blocking Chinese investments deemed security threats by the Committee on Foreign Investment in the United States (Cfius); more closely scrutinising consultants and others assisting Chinese firms under the Foreign Agents Registration Act (Fara); and espionage investigations vetted by the secretive Foreign Intelligence Surveillance Court, also known as the Fisa court.

“Death threats are one thing,” said Levick, who survived an armed uprising in Yemen. “A Fisa warrant is on an entirely other level.”

Executives say that Beijing’s strident pronouncements and aggressive policies – jockeying with India, expanding aggressively in the contested South China Sea and tightening its grip over Xinjiang, Hong Kong and Tibet – have made their situation tougher.

Such moves have fuelled American distrust. A Pew Research poll in late July found that 73 per cent of Americans held an unfavourable view of China, up from 47 per cent in 2017 and the most negative view in Pew’s 15 years of asking the question.

“The Chinese aren’t making it any easier,” said Sean Randolph, senior director of San Francisco’s Bay Area Council Economic Institute, which has partnered with China on Greater Bay Area issues. “There’s a real lack of transparency on a lot of things going on in Chinese policy that tends to encourage a level of concern that may or may not be warranted.”

With technological primacy a hot battleground, some note a growing wariness in Silicon Valley toward Chinese companies that appear motivated more by Beijing’s strategic directives than shared commercial benefit.

“There’s not a lot of sympathy for TikTok or Chinese companies more generally,” said the tech investor, who also criticised the administration. “If the US doesn’t want foreign-controlled media, then legislate that and be done with it.”

“The arbitrary and ad hoc nature of this decision is concerning,” he added, referring to the campaign to force TikTok’s sale.

TikTok isn’t alone in weathering high-profile defections. Last year, soon after Huawei Technologies’ chief financial officer Meng Wanzhou was arrested in Vancouver, its Canadian senior vice-president of corporate affairs resigned without explanation, followed a few months later by its Canadian director of corporate affairs. And in Britain, the company’s chief executive, Lord Browne, announced plans to leave this month after London restricted Huawei’s market access.

Headhunters say the geopolitical climate has made foreign managers think twice before jumping to a Chinese company.

“If you’re a really high-powered executive from Disney, Google, why would you join a Chinese tech company right now?” said Thomas Green, a London-based partner with executive search firm Calibre One.

“There’s so much ambiguity and volatility. Basically they’re saying they want some serious danger money if they’re a good negotiator.”

Foreign executives at Chinese companies working to expand North American markets and burnish corporate reputations say their job is compounded by cultural differences that often exclude non-Chinese from decision-making. That can leave them to carry out directives without question or leeway to tailor changes for a US audience.

“The stress builds up very quickly,” said Feller. “They’re put in the untenable position where they’re told to make magic, only to come up against the Chinese Great Wall of decision-making.”

“It’s opaque,” he added. “A party official or ministry official you didn’t even know vetoes a decision that even board members wanted to do.”

Engineering executive Guido Jouret left Cisco in 2015 after two decades to manage a Chinese software team at the Shanghai-based alternative energy start-up Envision Energy. After a year of grappling from California with trans-Pacific communication gaps and Envision’s start-up culture, he left and joined Nokia..Read more

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