Top US Companies Struggle in China; TikTok Tries to Block Ultimatum Law | China in Focus

Welcome to China in Focus. I'm Tiffany Meyer. Our top story was just three weeks left before the new year. A closer look at why some major business groups like Apple, Tesla and Starbucks are seeing their sales plummet inside China. Will TikTok get banned from US app stores next month? The app is fighting for survival and turning to the Supreme Court for help. More on President-elect Trump's stance on the issue. Would American families pay more if Trump slapped sweeping tariffs on China, Canada and Mexico? Details on what the president-elect had to say. I can't guarantee anything. I can't guarantee tomorrow. And Taiwan's military is on high alert. This after China deployed almost 90 naval vessels near the island. Despite that, a resident explains why the island isn't panicking. It's getting harder for Western companies to do business in China. On Monday, Chinese regulators announced an anti-monopoly investigation into Nvidia. The US company is one of the world's leading microchip makers. The move is being seen as retaliation after Washington launched new export restrictions on what chips can be sent to China. Amid rising tensions between the two countries, many major companies have found their operations struggling in China. China is American coffee chain Starbucks's second largest market, but its new CEO Brian Nicol recently described running a business in China as tough, adding the company is facing extreme competition inside of China. From July to September, Starbucks's sales in the country dropped 14%. Apple has also failed to impress Chinese consumers and saw its sales drop nearly 8% last year. And last month, Elon Musk's Tesla reported over 4% sales decline in the Chinese market compared to last year. In recent years, two fast food franchises, McDonald's and Kentucky Fried Chicken, have both sold off notable percentages of their Chinese steaks. Why has China become a tough market for business giants? Firstly, the market is shrinking. Based on N.D.D.'s estimates, at least 100 million people died in the country due to the COVID-19 pandemic. Beijing is facing allegations on the world stage for covering up its true death toll. Secondly, a slow economy has played a key role in reducing Chinese people's purchasing power. Almost all the pillar sectors that usually drive the Chinese economy are sinking exports, domestic consumption and foreign investment. A real estate crisis has caused huge financial losses for many Chinese families over the past few years. What's more, Beijing revised its anti-espionage law last year. The new policy gives Chinese authorities power to raid offices or arrest executives if the regime labels them as threats to its state security. The arrest power does not require other reasons, and it's sparked fear of arbitrary arrests and charges among foreign businesses operating in China. Zooming out, multinationals are feeling the heat as tensions roar between the U.S. and China. The U.S. has been ramping up tariffs and sanctions against China's exports since President-elect Trump's first term in office. President Biden kept most of the Trump tariffs in place and even expanded some of them. Now, Trump is threatening Beijing with even higher tariffs. That's to counter the flow of Chinese goods entering the U.S. border through other countries, like Mexico, a tactic for evading U.S. tariffs. In response, China has launched investigations into multiple leading foreign companies, like NVIDIA. Beijing also issued several export bans targeting the U.S. On the other hand, some experts say that tariffs and sanctions could lead to higher costs for American businesses and might decrease trade volume with China. Will President-elect Trump save TikTok? Like banking on that word for its survival in the U.S. TikTok asked a federal court Monday to hold off a ruling that could ban the app, meaning the law wouldn't go into effect while TikTok asked the Supreme Court to take up the case. Meanwhile, President-elect Trump said on the campaign trail that he would save the app if elected. At the time, Trump encouraged TikTok supporters to vote for him. Trump's pick for National Security Advisor Congressman Mike Waltz also said Trump wants to save the app. We absolutely need to allow the American people to have access to that app, but we have to protect our data as well. TikTok is owned by ByteDance, a developer based in China. Under Chinese law, Chinese companies must hand over user data if Chinese authorities ask for it. The Justice Department has sued both TikTok and its Chinese parent. It accuses the app of failing to protect online privacy for American Children. The DOJ said TikTok collected information on Children under the age of 13 without the consent of their parents. President-elect Trump sat down for his first major interview since winning the election. He spoke on a wide range of policies with Kristen Welker on NBC's Meet the Press. The president-elect was asked about his terror policies and the impact he expected them to have on the economy. NTD's Fiona Ji has more. Economists of all stripes say that ultimately consumers pay the price of tariffs. Can you guarantee American families won't pay more? I can't guarantee anything. I can't guarantee tomorrow, but I can say that if you look at my just pre-COVID, we had the greatest economy in the history of our country. And I had a lot of tariffs on a lot of different countries, but in particular China, we took in hundreds of billions of dollars and we had no inflation. The interview covered a wide range of other topics as well, including Trump's deportation plans and foreign policy. At the end of the interview, when asked about his message to Americans who did not vote for him, Trump said he would treat all Americans equally and that success would unite the country. Fiona Ji, NTD News. During that Sunday interview on NBC, President-elect Donald Trump said he recently spoke with Chinese Communist leader Xi Jinping. During the Sunday interview, Trump also said he recently spoke with Chinese Communist leader Xi Jinping. The president-elect said, quote, we've had communication, but he didn't specify when or what the exchange was about. They last met in June in 2019 at the G20 summit in Japan. When asked about whether the U.S. will defend Taiwan if China invades the island during the coming administration, Trump said, quote, I never say, adding that he has to negotiate things. Trump also said he had a very good relationship with Xi. Trump also asked Xi Jinping to help end the war in Ukraine. U.S. Defense Secretary Lloyd Austin is on his last trip to the Indo-Pacific. He arrived in Japan on Sunday, where he spoke aboard a U.S. Navy ship about the threat posed by China. The PRC is the only country in the world that has the intent and increasingly the capability to change the rules-based international order. And so, you know, we want to see this region, this area remain open to freedom of navigation and the ability to fly the skies and international airways, whatever we want to. We want to see that remain. Our commitment is that we will continue to help Taiwan obtain the ability or capability that it needs to be able to defend itself. We don't want to see any kind of unilateral change to the status quo in the Taiwan Strait. What's more, Austin's scrapped plans for a visit to Seoul following the South Korean president's short-lived declaration of martial law last week. Another update from Taiwan. The island raised its alert level for security threats after detecting up to 90 Chinese ships in the water surrounding it. Taiwanese officials say China has set up seven reserved areas of airspace, which temporarily put restrictions on who can fly through them. Here's more. Taiwan raised its alert level on Monday as it said that Chinese vessels were massing in the area. In what are likely to be military drills, a senior Taiwanese security official said Beijing currently has nearly 90 naval and Coast Guard vessels in waters near Taiwan, the southern Japanese islands and the east and south China seas. China, which claims democratically governed Taiwan as its own territory, had been expected to launch a fresh round of military exercises. That's in response, security sources said, to Taiwan President Lai Ching-teh's trip to the Pacific, which included stopovers in Hawaii and the U.S. territory of Guam. Beijing's defense ministry did not immediately respond to a request for comment, but at a foreign ministry briefing, spokesperson Mao Ning dismissed Taiwan's concerns by asserting China's claim over the island. Lai and his government reject Beijing's sovereignty claims, saying only Taiwan's people can decide their future. Even though Taiwan's military is on high alert, life on the island is continuing on as normal, with no signs of panic or disruption. A Taiwanese resident gives his take on why. I believe that if panic leads to a decrease in our productivity or prevents us from living our normal lives, then we have already lost. Therefore, we should remain calm and live our lives normally while staying vigilant towards them. China. Beijing has been expected to launch drills since the Taiwanese president made two stopovers in the U.S. President William Lai visited Hawaii and Guam as part of a trip to the South Pacific. Coming up, the president of South Korea now under investigation over alleged treason. We have the latest on the country's biggest political crisis in decades. And Chinese-owned TikTok now turning to the Supreme Court for its survival. Did President Trump save the app before his inauguration? Andrew Selipak, social media professor at University of Florida, weighs in. You know, it's already banned in India. It's not actually even available in China. They have their own versions. That and more after the break here on China In Focus. Welcome back to China In Focus. I'm Tiffany Meyer. Next, a closer look at the ongoing political unrest in South Korea. President Yoon Suk-hyo has been banned from leaving the country. A justice ministry official told the committee Monday that the travel ban order is now in effect. Here's more on that and the market's reaction. South Korean stocks took a fresh hit Monday, reacting to the country's deepening political turmoil. Over the weekend, President Yoon Suk-hyo survived a bid to impeach him over last week's short lived declaration of martial law. But media reports say he has been named by prosecutors as the subject of a criminal investigation over the incident and Yoon's own party, which boycotted the impeachment vote, says he will be excluded from his duties and pressed to step down. The country's benchmark KOSPI stock index was down over 2% by early afternoon amid the chaos. Blue chip names were among those to take a hit, with Samsung Electronics and Hyundai Motor both down around 1%. On currency markets, the Korean won traded broadly flat versus the dollar, having endured sharp falls during last week's drama. Over the weekend, Finance Minister Choi Sang-mok said the government was ready to act in the market. He said maintaining credibility was the priority and vowed to work with the country's central bank to calm any volatility. Even so, tensions remain high, with uncertainty over Yoon's fate and his grip on power. On Monday, the defense ministry said he was still commander in chief and thus head of the armed forces. But multiple military officials and the acting defense minister all said they would refuse to obey any new order to impose martial law. A federal appeals court zeroing in on the law that could ban TikTok if it's China based parent company refuses to sell it. Previously, TikTok argued that ban would violate America's free speech. But the court dismissed that claim, saying that by upholding the ban, it's protecting freedom of speech from a foreign adversary nation. Now, TikTok is asking the court to hold off a ruling. For more about what could happen next for the app, Evelyn Lee with NTD Good Morning spoke with Andrew Selipak. He's a social media professor at the University of Florida. Andrew, good to have you back. So possible ban still on the table for TikTok. Tell me more about what do you see next happening for TikTok between now and January 19th, where a ban could come into effect. Well, there's a number of different scenarios, and that's sort of where we're sitting right now. We do have the fact that TikTok is going to try to get this before the Supreme Court before the ban. And in doing so, maybe get the Supreme Court to make a decision or get a stay on when this would actually come through. You also have the fact that President Biden could also give it a stay of about 90 of 90 days. You can do it one time to allow this kind of process to go through. One of the biggest things is that if you look at the date in which this has to be done and the inauguration of Donald Trump, he really has the least that he can actually do when it comes to this. Unless the Supreme Court makes a decision, there's a delay of some sort. But with the deadline in place right now, it's really kind of up to the Supreme Court. It's up to the Biden administration. Congress isn't going to be getting much done between now and January, so not much that's possibly going to happen except for this decision to really be upheld and kind of go move forward. So what could it mean for people that have TikTok on their phones right now? I mean, what will happen to those apps and the way they can be used? Again, this is where we have a lot of different potential scenarios. One of them is that if it's no longer being available in the app store for your iPhone or through Google, you could still have the app on your phone. It would still work. It's just that because you wouldn't have it in the iStore, you wouldn't have it in the Apple Store. You wouldn't have it for your Google Play Store. You wouldn't get updates. So to fix any bugs or to get any new changes to the app, you would still have it on your phone. You'd still be able to use it is one and probably the most likely scenario. And when it comes to that, the big thing that I think people need to keep in mind is a lot of this kind of conversation comes down to, at least on the part of ByteDance and TikTok, saying, well, this is a free speech issue. Conceivably, and this is sort of where we can all kind of play armchair lawyer. No one's free speech is being limited. You can still express yourself on any number of social media platforms in video format as well. And the fact that you would still have the availability to use this app, it just wouldn't be getting updated and so forth. Still, it makes it to where I think it's why we had the Court of Appeals kind of side against ByteDance and why the Supreme Court also probably would side against ByteDance and might not even take up the case. Part of it, because with the sort of conservative leaning of the court, most likely they don't want to do anything that kind of really goes against the legislative and the executive branch if neither one's doing anything there. Now, let's talk a little more about what you think might happen with the phase. I know you just talked about that. It might be kind of a slow phase out by not allowing updates anymore. But would there be a way to bypass all that, you know, even after a ban is in place? We have VPNs, for instance, for websites. I don't know. Maybe TikTok is also accessible still on the browser. Do you see potential that there are ways around that ban? Well, that's where you have the difference between a desktop version and a mobile version, because even if you have the VPN, you know, to what extent the Apple Store and the Google Play Store will still be offering updates in other places. So if you have your VPN, let's say you check into the European Union, they have their own sort of privacy and security laws and regulations. You know, it's already banned in India. It's not actually even available in China. They have their own version. So, you know, the VPN, if you use it, and, you know, while TikTok is a platform that is predominantly younger people and a lot of younger people who probably have knowledge of VPNs and understand how they work, when you look at the 170 million people who do use it, how many of them are going to use a VPN, get a VPN, get a reputable VPN and continue to use it? When you look at it from that framework, even some of the workarounds, you're still going to see a drop of a large number of people who just would not continue to be using it. I mean, you're talking potentially tens of millions when it starts to get into that. And again, part of it's because there are plenty of other options if you just want video content. There is Instagram. Instagram at any time could make their sort of update and become more TikTok-ish YouTube rumble videos on Telegram. There's lots of options where you can get entertaining content, news content and so forth. Right. So talking about that, talking about TikTok's competition in particular, what other social media platforms do you see benefit from this ruling the most? Well, we can go back and statement that Trump had made in the past, and this is sort of after his original attempt to ban it, and then when it kind of moved to the Biden administration's attempt to ban it, he seemed to have some comments against banning it. One, believing that it was going to help Zuckerberg and Meta the most, and Trump not being a big fan of Facebook and Meta for banning him. But you can also see that Trump did use TikTok from and during his campaign, not as much as the Harris campaign, in fact, a fraction of what the Harris campaign used it for, but did use TikTok, did get a lot of engagement on the few posts that his account made on TikTok. So you could again see the Trump administration that's not necessarily going to do much. Essentially, one of the things that could happen is that you could have where his Department of Justice simply doesn't do much and therefore doesn't necessarily try to go after Apple or Google for offering the TikTok in their app stores, in which case it's sort of up to the tech companies, the opposing tech companies, Google, Apple, if they want to continue to let it into their app stores, knowing that literally at any time, even the Trump administration could switch DOJ policies and start going after them. So I think all around when you look at the tech companies, you have Meta, which I think will definitely benefit from this, probably the most. The tech companies that might benefit the least, Google and Apple, and obviously ByteDance themselves. Right. Well, lots of open questions still, actually, but unfortunately, we're running out of time for today. Thank you so much, Andrew Selipak, for sharing your insights. I appreciate it. Thank you. That's all for today's China In Focus. I'm Tiffany Meyer. If you have any feedback on the show or have something you'd like to see us cover, send us an email at ChinaInFocusNTD.com. We'd love to hear from you. For around-the-clock original news coverage, visit us at NTD.com or download our NTD app. Thanks for watching. See you tomorrow. Coming up on NTD, stay tuned for America's Hope with Kelly Wright. Tonight, a touching story in time for the holiday season. Kelly talks with singer and musician Jason Lovins. He's been using music to inspire people for close to 20 years and sharing his own shocking origin story. Now, he sends the message that the power of love can shape a person's life and offer courage when the odds seem stacked against you. That's tonight at 10pm after China In Focus. Thanks for watching. See you tomorrow.