Are Americans Worried About Chinese Apps?

Not really.

Actually, not at all.

If you look at the top three free apps on the Apple App Store, they are Temu (by Pinduoduo), CapCut, and TikTok (both by ByteDance). If you happen to be an Android person, the top three free apps on Google Play are Temu, TikTok, and SHEIN.

Source: SensorTower

The disconnect between what Washington, DC policymakers say about these apps and what ordinary Americans are downloading onto their smartphones could not be wider.

If we take the DC policy circle perspective at face value, America should be in a national security crisis right now. If we take the behaviors of US smartphone users at face value, then this fear of Chinese-made apps is a giant nothing burger.

Neither is true. My view on all this is more nuanced. 

There are legitimate national security, data privacy, and corporate governance concerns with TikTok. Myself and others have been writing about these concerns since mid-2020, when the app became popular in the US, but few understood how it worked. When a whistleblower recently exposed TikTok’s questionable data practices, where China-based engineers had “master admin” access to American user data, I did a lengthy teardown of TikTok’s problems, and also proposed some solutions. While laws have been passed to prohibit TikTok on government devices and a few university campuses, the core problem with TikTok remains unresolved. 

Meanwhile, the DC policymaking circle has moved beyond TikTok to construct an all-encompassing worldview where all apps made by Chinese tech companies are bad. In this worldview, whether an app sells cheap fashion (SHEIN), or cheap toys and trinkets (Temu), or is just a video editor (CapCut), they are all national security threats. Not only does this perspective reeks of xenophobia unseen since the Chinese Exclusion Act, it also flies in the face of the struggles of ordinary consumers in a high-inflation environment, who are trying to stretch every dollar they can. Thus, people continue to download these apps, unafraid and unperturbed. 

This stark disconnect exposes the tension between a policymaking elite who may actually be right but lacks credibility among its citizens, while the forces of free market capitalism are dictating the winners. 

DC’s Credibility Problem

Both ByteDance and Washington, DC have credibility problems. ByteDance’s problems are well-documented, so I won’t belabor them here. DC’s problems are more subtle, especially if you have not personally experienced how power works in Washington (which most people have not, though I happen to have), and more awkward to talk about.

Despite TikTok’s problematic user data practices and the ever-present possibility of Chinese government interference, US legislators, policymakers, and think-tankers have yet to produce any concrete evidence of harm done by the app. Compared to all we know about Russia using Facebook to sway voters in the 2016 election, evidence of TikTok doing harm to the American people or society at large has all been circumstantial and loosely inferred so far. TikTok was a non-factor during the 2022 midterm election despite its popularity. It could be a big factor in the 2024 presidential election, and the Chinese government would want to use it to interfere. But they are all conditionals. That’s precisely where DC’s credibility problem lies – treating “could’s” and “would’s” as real harm.

Meanwhile, other allegations against TikTok inadvertently make the US government look bad. One common narrative is that TikTok’s Chinese version, Douyin, shows only educational content in its “Youth Mode” and has a 40-minute anti-addiction feature. The US version that ByteDance ships is the ultra-addictive “opium version” (at least according to CBS 60 Minutes), engineered to harm us. Cringe-worthy descriptor aside (Opium version? Seriously, Tristan Harris?), “Youth Mode” and the anti-addiction feature exist because the Chinese government made laws to limit the social media diet of its youth, so ByteDance had to comply. If the US government made a similar law, TikTok’s US version would have to comply as well.

Leslie Jones of Saturday Night Live fame probably echoed the sentiment that most Americans shared when they saw that 60 Minutes segment on TikTok, with her comment on Instagram:

“I just wonder when will we actually care about this country. Not the fake patriotic bullshit! Like really care about our children, society, and future! Other countries are! When will all this bullshit we are doing to each other gonna stop!”

A narrative that was intended to make the Chinese government look scary, and ByteDance look bad for working at the behest of the Chinese government, ends up making the US government look feeble and unfocused on its day job. Passing a law to mandate “Youth Mode” and an anti-addiction feature on not just TikTok but any social media app, would be quite welcomed by American families and win more than few votes for politicians who champion it. Instead, the only law passed against TikTok so far is prohibiting it on some government devices, which impacts very few Americans. (Private sector jobs account for roughly 85% of all jobs, local governments account for 10.1%, state governments account for 3.3%, and the federal government is a rounding error.) While TikTok’s problem and impact on society remains frustratingly unsolved, the DC policy circle has moved on to target all apps made by Chinese tech companies, from e-commerce to video editing, no matter how innocuous they are, with scary but empty words, like “data harvesting”, “data exploitation”, and “covert influence.”

Why is this happening?

Believe it or not, bashing TikTok or Chinese tech companies in general is quite a “sexy” issue, especially for ambitious politicians or ambitious policy wonks hoping to work for one of those politicians one day. I’m not suggesting that everyone who works on these issues are Machiavellian careerists – there are serious people who take these issues seriously and do serious work to present serious solutions. Sadly, they seem to be outweighed by a larger group who clearly recognizes that being “anti-China” is a political gravy train that’s good for one’s career.

When TikTok’s CEO goes in front of the House Energy and Commerce Committee on March 23 to testify, I’ll bet a decent wager that no solution or concrete proposal will come out of it. That’s because, as my favorite fictional political strategist from The West Wing, Bruno Gianelli, would say, “you want the issue.”

If an issue is resolved, you can’t talk about that issue as a problem any more. That means no more Op-Ed’s (like this one) to write, no more legislative proposals with cringy acronyms to push (like this one) to grab media attention, and no more crowd-pleasing populist talking points to be folded into the next campaign cycle, which never stops. TikTok, Temu, SHEIN, and whichever Chinese app becomes popular next are politically more useful as open problems than closed issues, even if the problems are real and solvable.

That’s the sad reality of how power in a competitive democratic system with a perpetual campaign season works. 

Meanwhile, Free Market Capitalism

While the jostling in DC of who can milk the anti-China gravy train harder chugs along, apps made by Chinese tech companies are climbing the download charts, thanks, ironically, to all the forces of free market capitalism. These apps are either better products, or can sell much cheaper goods due to the efficient supply chain supporting them in China, or are being promoted with a large war chest of marketing dollars funded by their Chinese parent companies. And these Chinese parent companies have all been beneficiaries of venture capital from the West, best practices from Silicon Valley, and more capital from Wall Street, combined with China’s own version of cutthroat free market capitalism, which may be phased out soon. 

For TikTok, it is a better social media product, so much so that Snap, Instagram, and YouTube have all tried to copy it. Since ByteDance is already generating massive amounts of ad revenue in China, it allocated billions of dollars to fund TikTok’s user acquisition spending – something Snap’s CEO, Evan Spiegel, complained about, even though his own product was just not good enough and his cloning effort failed miserably. 

For SHEIN, it took the fast fashion model of H&M to the extreme, with better prices and better targeting, supported by a massively efficient clothing supply chain in China that’s willing to make any design in small batches. The products are cheap, easy to rip, and terrible for the environment, but it is just good enough to attract shoppers who want a Burberry coat look without the Burberry price tag. This low cost, high fashion strategy plays extremely well with lower to middle-class American consumers who are most negatively impacted by inflation for the last two years (and counting). 

As for Temu, it is bolder than perhaps both TikTok and SHEIN. Not only is it betting on the social-buying with steep discount model succeeding in the US – the same model that made its parent company, Pinduoduo, a household name in China, it is willing to spend big on advertising to let Americans know it is here with a $14 million Super Bowl ad buy. While it is too early to tell if this massive expenditure was worth the money, during the Super Bowl, the top three states that searched for Temu the most were Mississippi, West Virginia, and Alabama – which is socio-economically similar to the 2nd and 3rd-tier cities in China, where Pinduoduo initially gained traction eight years ago. (For a good analysis of Temu’s Super Bowl ad campaign, see this post by

Ivy Yang

on

Pekingnology

) 

Op-Ed: “Billionaire” Splurge: Temu’s Super Bowl Debut

What the free market god giveth, the free market god could taketh away. 

TikTok may eventually fail because there is no moat to content creation, where every creator simultaneously posts on TikTok, Instagram Reels, and YouTube Shorts. SHEIN may eventually fail because a more environmentally conscious younger generation will turn back on its products because of their poor sustainability and poor quality. Temu may eventually fail because its “Shop Like a Billionaire” jingle is tone deaf, and its steep discounts will burn too much money. 

It is one thing to fail in a fair, free market competition. It is quite different to fail when the government simply wants you to fail. American tech companies who tried to enter China for the last two decades are all too familiar with this predicament. Now the table has turned. What remains frustratingly unclear is: are these apps the nefarious puppets of a Chinese government hellbent on spying on and destroying America or is “national security threat” just an excuse to exercise protectionism?

Until Washington, DC clears that up, fixes its credibility problem, and lets its own ambition get out of the way, ordinary Americans will likely keep on downloading these apps, whether they should or not.