Not so long ago every western technology group wanted to be in China. The prospect of signing up the nation’s 1bn-plus citizens was a prospect too lucrative to ignore. For many, Hong Kong offered a perfect base: close enough to China but not subject to Beijing’s more stringent laws. All that has changed in the space of the past week.
Facebook, Google, Twitter and Microsoft quickly indicated they were “pausing” co-operation with requests for user information while they assess a sweeping new security law. TikTok, the Chinese video-sharing platform, on Tuesday said it was withdrawing from the city over concerns the law will affect the control of user data. TikTok, owned by tech group ByteDance, cannot afford to lose access to the US market by being seen to submit to a legal crackdown in a city that until now has shared western standards on free speech and the law. US secretary of state Mike Pompeo has already threatened to close TikTok in the US. The group’s business in Hong Kong is not big; last year it had just 150,000 users in the city. ByteDance could simply decide to roll out its mainland brand, Douyin, which is monitored by Beijing.
For others, however, notably social media networks such as Facebook and Twitter, whose business models rely on dealing in information and freedom of expression, there is no easy way out. The consequences of withdrawing from Hong Kong are significant but so too is the price of accepting the restrictions, not least in terms of credibility with western users. Apple has so far said only that it is “assessing” the situation. As a supplier of kit, more than information, it is less in the crosshairs. But it also has a lot to lose: it does more business than any of the tech giants in the country, generating $44bn of revenue in Greater China last year.