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China’s tech firms growing influence

Big tech competition heats up

Chinese big tech companies have emerged as some of the most influential players in the global technology landscape, driving innovation and shaping industries across the board. These companies are deeply entrenched in everyday life in C h ina, offering a wide range of services and products that span e-commerce, social media, gaming, cloud computing, ΑΙ, and telecommunications. Their influence is not confined to China, they also play a significant role in global markets, often competing directly with US tech giants.

The rivalry between China and the US has become one of the defining geopolitical struggles of the 21st century. This competition oscillates between cooperation, fierce competition, and confrontation, influenced by regulatory policies, national security concerns, and shifting political priorities. The geopolitical pendulum of China-US tech firms, totally independent from the US election outcome, reflects the broader tensions between the two powers, with profound implications for global tech industries, innovation, and market dynamics.

China’s access to US technology will face further restrictions after the election.

The Golden Shield Project

In 2000, under Chairman Jiang Zemin’s leadership, China launched the Golden Shield Project to control media and information flow within the country. The initiative aimed to safeguard national security and restrict the influence of Western propaganda. As part of the Golden Shield, many American tech giants such as Google, Facebook, and Netflix were blocked by the Great Firewall for not complying with China’s data regulations, while companies like Microsoft and LinkedIn were allowed to operate.

At the same time, China’s internet user base grew dramatically, reaching 800 million netizens by 2018, with 98% using mobile devices. This rapid expansion provided a fertile ground for Chinese tech firms, which thrived without significant competition from foreign players. Among the earliest beneficiaries of this system were the BATX companies, which capitalised on China’s evolving internet landscape and rapidly established a dominant presence in the market.

The powerhouses of Chinese tech

The major Chinese tech companies, often referred to as the Big Tech of China, include Alibaba Group, Tencent, Baidu, ByteDance, Huawei, Xiaomi, JD.com, Meituan, Pinduoduo, and Didi Chuxing.

Alibaba Group is a global e-commerce and technology conglomerate, operating platforms such as Taobao and Tmall for e-commerce, AliExpress for international retail, and Alipay for digital payments. The company also has significant investments in cloud computing with Alibaba Cloud and logistics.

Tencent, a massive tech conglomerate, is known for its social media and entertainment services. It owns WeChat, a widely used messaging app that offers payment services, social media features, and more. Tencent also has investments in gaming, owning major stakes in Riot Games, Epic Games, and Activision Blizzard, as well as interests in financial services and cloud computing.

Baidu, often called China’s Google, is a leading search engine provider. In addition to its search services, Baidu has a strong presence in AI development, autonomous driving, and cloud computing, particularly focusing on natural language processing and autonomous vehicles.

ByteDance, the company behind TikTok, has made a name for itself in short-form video content and AI-driven platforms. It also operates Douyin, the Chinese version of TikTok, along with Toutiao, a popular news aggregation platform. ByteDance has expanded into gaming, e-commerce, and other AI technologies.

Huawei is a global leader in telecommunications equipment and consumer electronics, particularly smartphones and 5G infrastructure. The company is deeply involved in cloud computing and AI, despite facing significant geopolitical challenges.

Xiaomi is a leading smartphone manufacturer that also produces smart home devices, wearables, and a wide range of consumer electronics. The company is growing rapidly in the Internet of Things (IoT) space and AI-driven products.

JD.com, one of China’s largest e-commerce platforms, operates similarly to Alibaba, focusing on direct sales, logistics, and tech solutions. JD.com has also made significant strides in robotics, AI, and logistics technology.

Meituan is best known for its food delivery and local services platform, offering everything from restaurant reservations to hotel bookings. The company also operates in sectors like bike-sharing, travel, and ride-hailing.

Pinduoduo has rapidly grown in e-commerce by focusing on group buying and social commerce, particularly targeting lower-tier cities and rural markets in China. The platform offers discounted products to users who buy in groups.

Didi Chuxing is China’s dominant ride-hailing service, offering various transportation services such as ride-hailing, car rentals, and autonomous driving technology.

But what are the BATX companies we mentioned earlier?

BAXT

The term BATX refers to a group of the four dominant Chinese tech companies: Baidu, Alibaba, Tencent, and Xiaomi. These companies are central to China’s technology landscape and are often compared to the US “FAANG” group (Facebook, Apple, Amazon, Netflix, Google) because of their major influence across a range of industries, including e-commerce, search engines, social media, gaming, ΑΙ and telecommunications. Together, BATX companies are key players in shaping China’s tech ecosystem and have a significant impact on global markets.

China’s strategy for tech growth

China’s technology development strategy has proven effective in propelling the country to the forefront of several high-tech industries. This ambitious approach, which involves broad investments across both large state-owned enterprises and smaller private startups, has fostered significant innovation and created a competitive business environment. As a result, it has the potential to serve as a model for other countries looking to stimulate tech growth.

A key driver of China’s success is its diverse investment strategy, supported by government-led initiatives like the “Made in China 2025” and the “Thousand Talents Plan“. These programs offer financial backing and attract top talent from around the globe. This inclusive approach has helped China rapidly emerge as a global leader in fields like AI, robotics, and semiconductors. However, critics argue that the strategy may be overly aggressive, potentially stifling competition and innovation.

Some have raised concerns that China’s government support unfairly favours domestic companies, providing subsidies and other advantages that foreign competitors do not receive. Yet, this type of protectionist approach is not unique to China; other countries have implemented similar strategies to foster the growth of their own industries.

Another critique is that China’s broad investment model may encourage risky ventures and the subsidising of failures, potentially leading to a market that is oversaturated with unprofitable businesses. While this criticism holds merit in some cases, the overall success of China’s strategy in cultivating a dynamic and competitive tech landscape remains evident.

Looking ahead, China’s technology development strategy is likely to continue evolving. As the country strengthens its position on the global stage, it may become more selective in its investments, focusing on firms with the potential for global leadership.

In any case, China’s strategy has shown it can drive innovation and foster growth. Other nations hoping to advance their technological sectors should take note of this model and consider implementing similar policies to enhance their own competitive and innovative business environments.

But under what regulatory framework does Chinese tech policy ultimately operate? How does it affect the whole project? Are there some negative effects of the tight state grip?

China’s regulatory pyramid: Balancing control and consequences

China’s regulatory approach to its booming tech sector is defined by a precarious balance of authority, enforcement, and market response. Angela Zhang, author of High Wire: How China Regulates Big Tech and Governs Its Economy, proposes a “dynamic pyramid model” to explain the system’s intricate dynamics. This model highlights three key features: hierarchy, volatility, and fragility.

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The top-down structure of China’s regulatory system is a hallmark of its hierarchy. Regulatory agencies act based on directives from centralised leadership, creating a paradox. In the absence of clear signals, agencies exhibit inaction, allowing industries to flourish unchecked. Conversely, when leadership calls for stricter oversight, regulators often overreach. A prime example of this is the drastic shift in 2020 when China moved from years of leniency toward its tech giants to implementing sweeping crackdowns on firms like Alibaba and Tencent.

This erratic enforcement underscores the volatility of the system. Chinese tech regulation is characterised by cycles of lax oversight followed by abrupt crackdowns, driven by shifts in political priorities. The 2020 – 2022 crackdown, which involved antitrust investigations and record-breaking fines, sent shockwaves through markets, wiping out billions in market value. While the government eased its stance in 2022, the uncertainty created by such pendulum swings has left investors wary, with many viewing the Chinese market as unpredictable and risky.

Despite its intentions to address pressing issues like antitrust violations and data security, China’s heavy-handed regulatory approach often results in fragility. Rapid interventions can undermine confidence, stifle innovation, and damage the very sectors the government seeks to strengthen. Years of lax oversight exacerbate challenges, leaving regulators with steep issues to address and markets vulnerable to overcorrection.

This model offers a lens into the broader governance dynamics in China. The system’s centralised control and reactive policies aim to maintain stability but often generate unintended economic consequences. As Chinese tech firms look to expand overseas amid domestic challenges, the long-term impact of these regulatory cycles remains uncertain, potentially influencing China’s ability to compete on the global stage.

The battle for tech supremacy between the USA and China

The incoming US President Donald Trump is expected to adopt a more aggressive, unilateral approach to counter China’s technological growth, drawing on his history of quick, broad measures such as tariffs. Under his leadership, the USA is likely to expand export controls and impose tougher sanctions on Chinese tech firms. Trump’s advisors predict a significant push to add more companies to the US Entity List, which restricts US firms from selling to blacklisted companies. His administration might focus on using tariffs (potentially up to 60% on Chinese imports) and export controls to pressure China, even if it strains relations with international allies.

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The escalating tensions have been further complicated by China’s retaliatory actions. In response to US export controls, China has targeted American companies like Micron Technology and imposed its own restrictions on essential materials for chipmaking and electric vehicle production. These moves highlight the interconnectedness of both economies, with the US still reliant on China for critical resources such as rare earth elements, which are vital for both technology and defence.

This intensifying technological conflict reflects broader concerns over data security, military dominance, and leadership in AI and semiconductors. As both nations aim to protect their strategic interests, the tech war is set to continue evolving, with major consequences for global supply chains, innovation, and the international balance of power in technology.

Ransomware disrupts Starbucks scheduling system

Starbucks is manually processing barista payroll after a ransomware attack disrupted the third-party software it uses for scheduling. Despite the outage, the company assured employees they would be paid correctly and instructed store managers on manual workarounds to keep operations running smoothly.

The attack targeted Blue Yonder, a cloud services provider whose clients include major grocery chains and Fortune 500 companies. Blue Yonder has faced backlash as its systems remain compromised, with multiple companies, including Ford, assessing potential impacts. The cybersecurity firm CrowdStrike is assisting with recovery efforts.

Ransomware attacks have surged globally, with hackers targeting critical operations, especially during high-demand periods like the holiday season. Starbucks’ new CEO Brian Niccol now faces an additional hurdle on top of three straight quarters of declining sales.

White House discusses China-linked telecom hack

The White House has engaged leading United States telecommunications executives in a high-level meeting to address a significant cyber-espionage campaign allegedly linked to China. National Security Adviser Jake Sullivan and Deputy Adviser Anne Neuberger hosted the meeting, seeking industry insights and strengthening government-private sector partnerships to counteract future cyber threats.

Earlier this month, US authorities disclosed that hackers, purportedly linked to China, accessed surveillance data meant for law enforcement by breaching multiple telecom companies. Senator Mark Warner described the breach as the ‘worst telecom hack in our nation’s history.’

Though the identities of the companies and executives involved remain undisclosed, the meeting underscores the urgency of cybersecurity improvements amid escalating threats from state-sponsored actors. While China has categorically denied involvement, the incident amplifies concerns over Beijing’s alleged cyber activities targeting critical US infrastructure.

The discussions aim to establish better safeguards against sophisticated attacks, reinforcing collaboration between federal agencies and the telecom sector to bolster national cyber resilience.

Outlook and Teams back online after disruption

Microsoft announced that most services for Outlook and Teams were restored late Monday after a widespread outage disrupted users throughout the day. While a small number of users continue to face issues with Outlook on the web, the company promised full restoration by Tuesday.

The disruption peaked with over 5,000 complaints logged on Downdetector, though Microsoft implemented fixes that restored functionality to 98% of affected environments by midday. Progress slowed in the afternoon, but by evening, reports of issues had significantly declined.

This outage, which impacted countless office workers ahead of the Thanksgiving holiday, is the latest in a year of major tech disruptions globally. Although significant, the scale of this incident was far smaller than the summer outage of CrowdStrike’s systems, which caused billions in losses across industries.

Australia pushes age limits on social platforms

Australia plans to enforce a ban on social media use for anyone under 16, requiring platforms to verify user ages through methods such as biometrics or government IDs. Prime Minister Anthony Albanese emphasised strict privacy protections, mandating the destruction of personal data once age verification is complete.

The proposed laws, among the toughest globally, would impact platforms like Instagram, TikTok, X, and Snapchat. They include no exemptions for parental consent or existing accounts, with non-compliance penalties of up to $32 million. Critics, including Elon Musk, argue the measures could restrict internet access for Australians.

The government aims to fast-track the legislation and pass it by Thursday, marking a significant step in global efforts to regulate social media and protect minors.

Victim warns of deepfake Bitcoin scams

A Brighton tradesman lost £75,000 to a fake bitcoin scheme that used a deepfake video of Martin Lewis and Elon Musk. The kitchen fitter, Des Healey, shared his experience on BBC Radio 5 Live, revealing how AI manipulated Martin’s voice and image to create a convincing endorsement. Des admitted he was lured by the promise of quick returns but later realised the devastating scam had emptied his life savings and forced him into debt.

He explained that the fraudsters, posing as financial experts, gained his trust through personalised calls and apparent success in his fake investment account. Encouraged to invest more, he took out £70,000 in loans across four lenders. Only when his son raised concerns about suspicious details, such as background music on calls, did Des begin to suspect foul play and approach the police.

Martin Lewis, Britain’s most impersonated celebrity in scams, described meeting Des as emotionally challenging. He commended Des for bravely sharing his ordeal to warn others. Martin emphasised that scams prey on urgency and secrecy, urging people to pause and verify before sharing personal or financial details.

Although two banks cancelled loans taken by Des, he still owes £26,000 including interest. Des expressed gratitude for the chance to warn others and praised Martin Lewis for his continued efforts to fight fraud. Meanwhile, Revolut reaffirmed its commitment to combating cybercrime, acknowledging the challenges posed by sophisticated scammers.

NITDA partners with TikTok to enhance digital safety and literacy in Nigeria

The National Information Technology Development Agency (NITDA) has partnered with TikTok under the ‘Safer Together’ initiative to enhance digital safety and literacy in Nigeria. That collaboration, announced at the TikTok Online Safety and Digital Awareness Programme in Abuja, reflects Nigeria’s leadership in Africa’s digital transformation, supported by a growing tech ecosystem and increasing connectivity.

The partnership addresses key challenges such as misinformation, cyberbullying, and digital exploitation while aligning with NITDA’s regulatory framework, emphasising awareness, innovation, and inclusivity. NITDA aims to achieve 70% digital literacy by 2027, fostering digital inclusion and empowering youth to drive the country’s digital economy. TikTok’s safety features, including screen time management and anti-bullying tools, are integral to educating parents, teachers, and stakeholders on safe and responsible digital practices.

The programme highlights the importance of collective efforts in creating a secure digital environment, requiring collaboration between the government, private sector, and civil society. Through initiatives like this, the partnership aims to inspire creativity, build trust, and shape positive digital experiences for millions in Nigeria while addressing the risks associated with technological advancement.

UK businesses have lost £44 billion to cyberattacks over five years

Briti sh businesses have lost an estimated £44 billion ($55 billion) in revenue over the past five years due to cyberattacks, with more than half of private sector companies experiencing at least one incident, according to a report by insurance broker Howden. Companies earning over £100 million annually faced the highest risk, with cyberattacks cutting 1.9% of revenue on average.

The report identified compromised emails (20%) and data theft (18%) as the leading causes of cyber incidents. Despite these risks, only 61% of businesses used anti-virus software, and just 55% had network firewalls, with cost and limited IT resources cited as major obstacles to better cybersecurity.

“Cybercrime is rising as businesses rely more on technology, exposing vulnerabilities to malicious actors,” said Sarah Neild, head of UK cyber retail at Howden. The findings are based on a September survey of 905 UK private-sector IT leaders conducted by YouGov.

US official warns that Chinese hackers target US critical infrastructure

According to Morgan Adamski, executive director of US Cyber Command, Chinese hackers are embedding themselves in US critical infrastructure IT networks to prepare for a potential conflict with the United States. He announced that China-linked cyber operations aim to secure strategic advantages in the event of a major clash.

These operations involve compromising key networks and positioning themselves to execute disruptive attacks. Examples include manipulating heating, ventilation, and air conditioning (HVAC) systems in server rooms or disrupting vital energy and water controls, officials said earlier this year.

Speaking at the Cyberwarcon security conference in Arlington, Virginia, Adamski emphasised the scale of the threat, noting that the US government has launched globally coordinated efforts to counter these operations. These efforts include offensive and defensive measures designed to degrade and disrupt China’s cyber activities worldwide. Actions range from exposing cyber campaigns to imposing sanctions and issuing cybersecurity advisories, with support from allied nations.

Earlier, US Senator Mark Warner described a suspected China-linked cyberespionage campaign, dubbed ‘Salt Typhoon,’ as the worst telecommunications hack in US history. Beijing has repeatedly denied conducting cyberattacks on US entities.

UN Cyber OEWG to host simulation exercise for states

The UN Office for Disarmament Affairs (ODA) will conduct a simulation exercise in early 2025 to help Member States engage with the Global Points of Contact (POC) Directory.

The directory ensures quick and effective responses to cybersecurity incidents by providing a reliable channel for diplomatic and technical contacts across countries. It is part of broader efforts to implement the agreed confidence-building measures (CBMs) and promote cyber stability and security globally, particularly under frameworks such as the UN’s Open-Ended Working Group (OEWG) on the security of ICTs. Most states have recently appointed their POCs and participated in the first ‘ping’ test (a test conducted by the directory manager to verify that the information in the directory is up-to-date).

In hybrid format, the exercise aims to familiarise nominated POCs with practical aspects of participating in the directory and clarify the roles of diplomatic and technical contacts. In collaboration with the UN Institute for Disarmament Research (UNIDIR) and the International Telecommunications Union (ITU), the event will occur virtually, with an in-person debrief.