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Wednesday, Jan 20, 2021

Washington puts heat on US executives working for Chinese firms

Washington puts heat on US executives working for Chinese firms

China links are increasingly stressful and unpredictable for American professionals in business, think tanks and academia.

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.

TikTok’s chief executive Kevin Mayer has quite the social media platform.

“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.”

In his resignation letter – echoed separately by TikTok’s owner, the Chinese technology giant ByteDance – Mayer blamed shifting US politics and reduced space to run TikTok effectively, given the overwhelming pressure to sell. He was leaving with “a heavy heart”, he added.

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 African strongmen – 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.

Lord John Browne, chief executive of Huawei Technologies’ British unit, announced plans to leave this month.

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.”

Senior engineer 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.

“This was not my first rodeo, I grew up in Asia,” he said. “I had the responsibility, but it felt like many of the decisions were made informally.”

A Washington lobbyist who joined a Chinese tech company last year said that he underestimated the challenges. “I always knew that the geopolitics of the moment were going to be in the background,” he said. “But that geopolitics has certainly come to the foreground.”

Officials in the Trump administration and Congress still take his calls, the lobbyist said, and often acknowledge his arguments and supporting data that protectionism frequently hurts Americans more than Chinese. But then he hits a wall.

“There are still good apples within departments and agencies,” he said. “But nine out of 10 conversations tend to end with their saying ‘However, the politics are X, Y, Z.’”

In May, Senator Marsha Blackburn, Republican of Tennessee, urged Congress to avoid even speaking with anyone associated with China.

“Chinese Communist Party [CCP] officials and Chinese entities should be shunned in the halls of Congress,” she wrote in a letter to colleagues. “Any Chinese agent of repression, even those dressed in business suits to disguise the green Maoist uniforms that they support, are not welcome.”

The Washington lobbyist said that part of him took this as a personal attack.

“That letter almost questioned my patriotism. I have yet to see anything working for this company that is CCP interference or influence going against my values as an American.”

Critics counter that Chinese government interference would not necessarily be evident to foreign nationals.

Corporate warriors are not the only ones feeling caught in the middle. Academics say that being Chinese-American or partnering with Chinese researchers is enough to attract scrutiny these days from the FBI, leading to questionable cases, racial profiling and damaged careers.

They add that often lost in all this are the benefits of global collaboration – now seen in the epic race for a Covid-19 vaccine – which far outweigh the risks. “This huge chill feeds into everything,” said Ali Nouri, president of the Federation of American Scientists.

Rebuffing talented Chinese and other foreign scientists who contribute extensively to American discoveries only makes US competitors stronger, Nouri, a molecular biologist, said.

“The illicit transfer of data from the US to China needs to be addressed, but you have to do it in a reasonable way. We need a scalpel, not a sledgehammer.”

In a recent case, more than a dozen Chinese researchers were ordered to leave the US last month after a Texas university suspended its relationship with a Chinese government-funded scholarship programme.

hina policy experts echo these concerns, adding that the aura of distrust impedes intellectual expression, fuels disloyalty charges, leads scholars to shun certain topics – and even think twice about entering the field of China studies.

Also in the mix are this year’s election dynamics as both parties work to outflank each other on their tough stance toward China and think tank luminaries quietly jockey for positions in the next administration.

“There’s concern, if you do this job, you don’t know what the next job will be, concern that these kinds of jobs are going to be viewed as suspect in the future,” said one long-time analyst, a veteran of liberal and conservative think tanks.

Policy wonks say a reluctance to visit China, once an exciting job benefit, undercuts expertise and makes the job less attractive as Beijing detains nationals from countries it is displeased with. One prominent example: think tank employee Michael Kovrig is one of two Canadians held after Meng’s 2018 arrest.

Michael Kovrig is one of two Canadians held by Beijing in what is widely seen as retaliation for Canada’s arrest of Meng Wanzhou of Huawei Technologies.

Another feature of the job nowadays, said a foreigner at a Chinese manufacturing company, is the constant onslaught of anti-China news. “Policy” out of Congress is too often thinly veiled protectionism fuelled by US competitors and trade unions, he maintained. “You can’t deny there’s tension.”

Randolph said that, as part of trying to keep open some measure of communication between the US and China, he was focused on ties at the state, provincial and local levels, “one of the few pathways we still have”.

“It’s challenging,” he added.

Even these ties are feeling the chill, however, after US Secretary of State Mike Pompeo announced new restrictions early this month on Chinese diplomats visiting local areas.

“It doesn’t help,” said Randolph, formerly a trade official for the state of California. “And it’s not going to get any easier.”


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