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Comment by philips | Hacker News Reader

My take:

DJI, Apple, Huawei, Google etc are all in a similar boat where the governments they operate under have publicly and privately pressured them to use their profitable platforms for spying or gathering evidence. This reduces their profitablity as consumers have less confidence the product isn't working against them.

But in the case of DJI and Huawei and TikTok the US is more concerned about how those chinese companies erode US business like boeing, cisco or Facebook. And instead of saying it is primarily economic protectionism they make it a defense issue to try and tamp demand.

In the end the best thing for consumers is if Apple, DJI, etc compete on having privacy preservation and feel compelled to make their products resistant to government influence.

So this new DJI feature is a good thing for consumers it seems.

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>But in the case of DJI and Huawei and TikTok the US is more concerned about how those chinese companies erode US business like boeing, cisco or Facebook.

Good joke about Huawei and Cisco. I can tell you the people eating Cisco's lunch are all other domestic companies and even big tech companies making their own network hardware.

Cisco on the other hand is an internal shitshow, they heavily outsource their software development to India resulting in "security patches" that attempt to just block user agents from triggering a exploit. :D

While I agree with you, I think there's something that should be pointed out: China stance on foreign companies doing business in China.

Currently China wants all the perks of the open global market, while closing it's own. I don't understand how this is allowed.

China's market is not closed to foreign companies. This isn't 1990 anymore.

American brands are everywhere in China, from Teslas, to iPhones, to McDonalds, to Starbucks, to the NBA, to the list goes on and on and on. Google, Facebook, Apple each make billions of dollars from China, every year.

Calling that a closed market is... Not at all accurate. It's by no means a fully[1] open market, but it's not a closed one.

[1] The definition of fully also varies from country to country. Is Canada a fully open market? No. For example, there's a lot of government protectionism surrounding media, and media infrastructure. Is the US a fully open market? No - again, not in the case of media infrastructure. Neither is an open market when it comes to food, or medical drugs. (For good reason, in my opinion - but that's just that - a political opinion. Other people have different opinions on this subject.)

> Google, Facebook, Apple each make billions of dollars from China, every year.

How does _Facebook_ make "billions" in China in particular? It's completely banned there.

https://en.wikipedia.org/wiki/List_of_websites_blocked_in_ma...

Also, as others might point out that "Way into China is to abide by their rules and regulations" - which is not true when the restrictions imposed are to gut out the business and establish a CCP-controlled branch that serves only Chinese people. For example, Wikpedia is blocked, how is Wikipedia supposed to even enter the "market" (I know its a non-profit org).

The truth is that China doesn't want western information, knowledge and values. This stance hides behind "rules and regulations".

A company doesn't have to sell things to the local population to do business there. There are many companies in China which wish to access the user base that FB has. Here is an article from NYT talking about the $5B that FB made from China during 2018: https://www.nytimes.com/2019/02/07/technology/facebook-china...

You forget; users are not Facebook customers. The advertisers are Facebook customers. Facebook may not be selling ads targeted to users in China, but it's sure as heck selling ads to Chinese companies.

Facebook: you're not the customer, you're the product.

It's not binary. China's market is more closed (or less open) than the US.

Sure. China is doing what all nation states do - use their advantages, exploit their competitors' weaknesses.

The US has (well, sometimes, to some extent) an ideological commitment to open markets. China does not.

The US exploited the advantages of open markets to great success.

Why would China not use the asymmetry now that they can?

Two lessons:

- Expecting your competitors to play by your rules is foolish.

- Concepts like morality and fairness get people going, but are not very useful to apply to nation states.

Try walking into China with a popular video game you own and selling it there. If it's big enough to get on anyone's radar, then it won't happen. You will be required to "partner" with a Chinese-owned company who will take a bunch of cash, a bunch of your ongoing revenues, maybe a little equity, and keep things humming with the local government. (And if you think that's implying something, it is.) That gets you initial access to the market. If you want to keep that access, you'll need to toe the line. (Expect the line to move.)

One example: NetEase doesn't operate Blizzard's games in China just because Blizzard thought it'd be a nice idea to share a piece of the pie.[0]

Western rules around media infrastructure ownership or food production, where almost all of the regulatory business is conducted out in the open, have no comparison here.

[0] https://www.gamesindustry.biz/articles/2019-10-11-publishers...

You're mentioning the largest American Brands, which do not represent the bulk of businesses. In fact they have different channels to setup their businesses and lobby their way around.

When I made that comment I was referring to SME, which is also the bulk of let's say, Chinese sellers on Amazon US.

Try to do what Chinese people do on Amazon, but on a Chinese platform as a SME, to sell products in China.

Your SME will be about as successful at operating in a Chinese market, as a Croatian SME will be successful at operating in an American market. That is to say, you'd need a pretty exceptional product, that is significantly better then local alternatives to get anywhere, because you're not going to be able to compete on price, or on brand recognition.

The reason Chinese SMEs are punching above their weight in foreign markets is because of their low cost of labour.

People often think it's labour, but it's much more than that. Low cost of everything. Transportation, production machinery, raw materials. And short lead times.

Try buying something like a coil winder, an induction heater, a spot welder, or a heat sealer. Even in the US, you're much more likely to find Chinese equipment more competitive and more readily available. Especially for an SME.

>Your SME will be about as successful at operating in a Chinese market, as a Croatian SME will be successful at operating in an American market

Well I guess that's depends on your definition of "successful", no?

Nothing stops a Croatian SME to enter the US market.

>That is to say, you'd need a pretty exceptional product, that is significantly better then local alternatives to get anywhere, because you're not going to be able to compete on price, or on brand recognition.

Even this is arguable because one of the biggest problems of Amazon US is the flood of low quality products, yet that doesn't stop them from being successful.

> Nothing stops a Croatian SME to enter the US market.

Then why aren't there any Croatian SMEs in the US market?

Is it because Croatians are bad at business? Bad at building things? Or do you think there may be other reasons for why they aren't successful?

> Even this is arguable because one of the biggest problems of Amazon US is the flood of low quality products, yet that doesn't stop them from being successful.

When you can't compete on quality, you have to compete on price.

I completely agree. I feel that China just directly protects their markets while for whatever reason the US hides behind a defense justification.

It would be socially destructive if America directly admits free market capitalism wasn't globally competitive after all. They don't have any other option but to hide behind national security justifications.

To those who still think this is about national security and most definitely not protectionist actions: why aren't these companies blanket banned immediately rather than given arbitrary timelines? India has demonstrated it is possible to do so and continues to be a self sustaining democracy.

Free market capitalism is a condition of peace, in the real sense that there's a spectrum from tariffs, to bans, to economic sanctions, leading to outright war.

Unilateral disarmament, where one party allows free access to markets while the other party does not, is actually a valid tactic. It's not always the wrong thing to do.

But choosing a tit-for-tat strategy instead isn't some sort of mark against free market capitalism. It just means that America has gotten tired of China defecting.

Which I approve of. Your mileage may vary.

I agree that there is a spectrum, and protectionist measures would not deviate from our economic values. Whether tariffs, bans, and economic sanctions are actually effective strategies is a separate discussion entirely.

But clearly there is a notion of free market capitalism one side seems to go to great lengths in protecting - which explains why they have been enforcing it under a separate pretense.

The argument would be that it is not a current threat, but could be used as one in the future, hence the timeline to the ban, giving them time to right their ship, as it were.

And even if this is a tit-for-tat retaliation against China, it isn't indicative of free market capitalism, because the 'tat' would be China closing off its own market and heavy handed government interference in any firm which wants to operate in China.

China also primarily uses a national security justification.

And neither the US's nor China's national security claims are unjustified. Election interference, propaganda, and espionage are very real and legitimate concerns that all major world powers have regarding their communication infrastructure.

Trump might talk a big game to his constituents about the outsourcing of jobs -- but his economic agenda has absolutely nothing to do with the national security concerns voiced by US public servants.

China does not primarily use a national security justification. They primarily don’t even bother to justify themselves. They freely ban whatever websites they want without communicating any rationale for the ban or clearly stating what is banned.

Of course they have justifications. They have justifications for their own people in their own legal documents, and they have a party ideology with a clear set of agendas.

"national security" is mentioned literally right at the beginning of the document that mandates the GFW.

> Article 3: The computer management and supervision organization of the Ministry of Public Security is responsible for the security, protection and management of computer information networks and the Internet. The Computer Management and Supervision organization of the Ministry of Public Security should protect the public security of computer information networks and the Internet as well as protect the legal rights of Internet service providing units and individuals as well as the public interest.

> Article 4: No unit or individual may use the Internet to harm national security, disclose state secrets, harm the interests of the State, of society or of a group, the legal rights of citizens, or to take part in criminal activities. [...]

http://www.asianlii.org/cn/legis/cen/laws/cinaispamr904/

That's just because the U.S. is better at propaganda then China. Probably due to cultural differences. In the west official term for this is "soft power". Propaganda is when China, Russia or other adversarial countries do it.

There is a whole lexicon of alternative doublespeak if you pay attention.

Propaganda is a positive word in China, that shows how culturally different US and China are. That's why there is a Department of Propaganda in China.

> I don't understand how this is allowed.

While I'd say it should no longer be allowed, especially given China's relative place in the world compared to (say) 20 years ago, can you blame them for the initial desire?

* https://en.wikipedia.org/wiki/Century_of_humiliation

Excepting circumstances where China could be affecting regional shared resources (e.g. damming a river -> drought in neighboring country, for example) is this not just based on willing participation?

I don't understand what exactly it is that is being 'allowed' that should be forbidden.. if China exports to foreign customers is it against moral sense to not allow in foreign business?

Also, I know of a certain country that relies heavily on its ability to sanction countries from effective participation in the entire global market..

>Currently China wants all the perks of the open global market, while closing it's own. I don't understand how this is allowed.

That's the same for the US. When it suits them there's sanctions, embargoes, tariffs, and questioning/forbiding foreign companies, investments, etc.

It isn’t the same at all. China routinely bans American internet companies for no apparent reason. Whereas the vast majority of Chinese companies are allowed to sell into the US. No other country operates like China does, with such drastic anti-foreign policies.

The US routinely bans foreign companies that threaten its cash cows, Bombardier is an example.

There’s a very clear reason, they don’t follow Chinese censorship and data laws.

Both Google and Facebook once operated in China, but after the multiple terrorist attacks, they were unwilling (or unable) to comply with Chinese laws.

That’s why Skype and iMessage are available in China, they comply with Chinese laws.

> but after the multiple terrorist attacks,

'Terrorist attacks' from who exactly? When French or Polish resistance members assassinated Germans, I bet the Nazis thought that was 'terrorism.' The Chinese government likes to cry and moans about 'terrorism' from Tibetans and Uyghurs, but the CCP are the real terrorists in these situations. Any American company that cooperates with them are abetting genocide.

Does your knowledge of Xinjiang and Tibet come from your own eyes, or from Western media propaganda?

I gleefully criticize my government. Do you dare publicly criticize yours?

It's easy to let people criticize when their criticism has no real impact, and they're gonna have to vote between the same two parties anyways...

The main difference is that the Chinese only have one party -- which means they don't have to pretend their votes matter which might even be seen as an improvement (at least honesty wise).

If you are naive enough to believe that the Chinese government sensors foreign internet companies so that they can protect their citizens from “terrorism”, I have a bridge to sell you.....

Let’s be real, the Chinese government only wants to allow internet companies that will allow them to monitor all communication and traffic between Chinese citizens so that they can stamp out any dissent. But dissent and disagreement is not terrorism. It’s both creepy and Orwellian.

I think this is a bit of a meme that we keep telling ourselves.

https://lite.cnn.com/en/article/h_7362899f13ec8816e5dee88b26... According to Lee Kai-Fu who launched Google in China: "Chinese laws are clear about what foreign companies can do to operate in China. In TikTok's case, though, the company was left no choice but to consider a forced sale."

China doesn't routinely ban American internet companies for no apparent reason. The same laws laid in the clear are what the American competitors in China follow. Google proactively made the choice to exit China (it also somewhat didn't. Google ads has a sizable market share in China as does Facebook). This is not to say that I'm suggesting that they should have elected to follow Chinese laws. But it's not arbitrary.

This would be akin to saying the French are savages and routinely ban gun toting Americans from visiting so we should feel justified to ban any French from visiting. Sovereign governments have their own laws.

>It isn’t the same at all. China routinely bans American internet companies for no apparent reason.

The reason is the China from the start saw US as a competitor to China's companies (and internal sovereignity, as the US likes to push its political agendas to other nations).

China wasn't seen as a competitor by the US, but as it's outsourced cheap factory - so as they were just that, they were ok. Now that China's companies get increasingly competitive and aim for the global market themselves, the US tries to stop them in various ways from doing business in the US.

("National interests" is a good catch all reason for that, "humans rights" is another good excuse - though when you do business just fine with all kinds of other human rights violator states - not to mention violate human rights left and right yourself -, it's evidently just an excuse).

Same thing when Japan got on the rise and started buying US companies and investing there. There was all kind of nationalistic objections, and in the end they were pressured to sign the Plaza accord, that hurt them to this day.

It is "allowed" because everyone has so far benefited tremendously.

It is of course possible to invest in China, most large Western companies have, and it is profitable.

We've also all benefited from the huge pool of Chinese cheap labour.

China has also obviously benefited through an incredible economic development, which actually also benefits Western economies.

Closing it's own as in? With the exception of internet giants, everything else seemed to be well represented in China.

name a western brand of physical good that's not available in China. Granted that our lives are more software oriented in this forum, majority of the trade in this planet is decidedly not.

If you are an average Chinese citizen you cannot access most of the internet due to the Firewall. It's a modern day protectionism at an extreme level given that increasingly large parts of the economy are digital services nowadays.

China is actually opening up their economy, but they still have quite a number of bans on foreign companies:

https://www.registrationchina.com/articles/china-negative-li...

Plenty of non-giant internet companies are banned in China as well.

Do those companies follow China’s data and censorship laws?

>Currently China wants all the perks of the open global market, while closing it's own. I don't understand how this is allowed.

Because that's the equilibrium between the countries. Each side tries to negotiate whatever is most to their advantage and that's that. China wants more control over companies, the US wants access to what is going to be the world's largest market and source of qualified labour.

Each side can say no and walk away. For many US companies however that'd represent a significant loss, so they accept the conditions. Same reason people give Apple a 30% cut on their store.

China not being open to multinationals is a common narrative on HN and not supported by the data.

In fact in consumer goods, foreign companies have more market share in China (40%) than the US (26%).

https://www.mckinsey.com/~/media/mckinsey/featured%20insight...

Foreign companies manufacturing goods in China that is... its hard to believe anything else given China’s $500b yearly trade surplus and tech transfer requirements. Also, report feels to have a bunch of speculative stats and projections.

I truly hate Trump, but the one thing I agree with him on is taking on China via a trade war. We really do need to use economic pressure to force them to act in a fair way especially with trade and stealing company secrets. I don't think any other president would be dumb enough to attempt this, but even a broken clock is right twice a day.

DJI has been subject to a crazy amount of hobbyist and professional reverse engineering, much of it made public by now.

I wouldn't underestimate the western multicopter scene and their ongoing hilarious shenanigans against the world's biggest drone maker.

This article is 3 years old now, you'd be mistaken thinking people gave up being given bigger challenges: https://www.vice.com/en_us/article/3knkgn/dji-is-locking-dow...

>But in the case of DJI and Huawei and TikTok the US is more concerned about how those chinese companies erode US business like boeing, cisco or Facebook

DJI makes consumer grade products and Boeing is a military contractor? How exactly does DJI impact Boeing's bottom line?

Boeing does have UAV programs afaict. And from the article:

> “The US Congress is considering banning the US federal government from using foreign-made drones as part of its 2021 National Defense Authorization Act,” reported Flight. A junior US defence minister, Ellen Lord, in charge of procurement, added to the aerospace magazine: “We looked at the fact that basically DJI from China had decimated our industrial base for small UAVs, quadcopters and so forth, through pricing that was sub-cost and so forth.”

Boeing drones are things like the MQ-25 [0]. They don't compete with DJI. I'm a researcher (US government contractor) in the aerospace field, and they've been trying to ban us from using DJI drones for years. They keep pushing it back and making exceptions because it has been incredibly hard for us to find anything comparable that's made by a US company (and even then the hardware is all Chinese, it's just assembled in the US and presumably running software that phones home to a server in the US rather than one in China.)

[0]: https://en.wikipedia.org/wiki/Boeing_MQ-25_Stingray

Not a surprise, since I doubt many US companies can sell their drones sub-cost.

> This reduces their profitablity as consumers have less confidence the product isn't working against them.

Most consumers do not give a damn about privacy. It is a growing sentiment, true, but it is not the majority of the user base.

> And instead of saying it is primarily economic protectionism they make it a defense issue to try and tamp demand.

I don’t think there is any mechanism that allows such government action except the national security loophole.

Let’s say there are navy sailors making Tik Tom videos on their ballistic subs, an app could in theory use its inertial sensor to record the path of the sub. Once the phone and it’s sailor has surfaced, it could upload the data.

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