London Daily

Focus on the big picture.
Saturday, Nov 22, 2025

The tech cold war is hotting up TikTok and the Sino-American tech split

The tech cold war is hotting up TikTok and the Sino-American tech split

Over the past few years countless predictions have been made that the global technology industry will suffer a painful rupture because of tensions between America and China. Real damage has been surprisingly hard to spot. Last year Apple made over $100m of sales a day in China, while Huawei reported record revenues despite America’s campaign to cripple it. Investors have piled into tech companies’ shares, buoyed by the prospect of new technologies such as 5G and a pandemic that is forcing billions of customers to spend more time and money online.
Judged by sales, profits and shareholder returns, it has been a golden era for American and Chinese tech. The industry now has a colossal market capitalisation of $20trn and accounts for a quarter of the world’s stockmarket value.

Yet if you examine the events of the past two weeks you can sense the split that is about to come. On July 6th Mike Pompeo, America’s secretary of state, said that the administration was considering banning TikTok, a Chinese-run app that is wildly popular in the West. This followed India’s decision a week earlier to prohibit it, and 58 other Chinese apps, after lethal brawls between soldiers in the Himalayas.

Britain and France are considering sidelining Huawei from their 5G networks (see article). Between July 6th and 7th Facebook, Google, Microsoft and Twitter all said that they will stop co-operating with Hong Kong’s authorities for the time being, because of the introduction of China’s brutal security law there. And SMIC, China’s aspiring semiconductor champion, has just said that it will raise $7bn in a state-supported listing in Shanghai—it delisted from New York last year (see article). The proceeds will be used to supersize China’s home-grown chipmaking capacity.

The split is happening at two velocities. The American and Chinese software and internet universes are heading at light-speed towards total separation. They were never particularly connected—American software firms made just 3% of their sales in China last year, and China has long kept its internet users isolated from the world. The bill for shutting up shop and finding substitute products is usually low.

TikTok creates few jobs and pays little or no tax in America or India, so the main cost of banning it is sullen teenagers. Likewise, Facebook and the other firms taking a stand in Hong Kong do little or no business in China. Two important exceptions have been Microsoft’s office software and, especially, Google’s system of apps like Gmail and Maps, found on Chinese-made phones sold worldwide. America’s blacklisting of Huawei has cut off the world’s second-biggest phone seller from some of the world’s most popular apps. Chinese handset firms are racing to develop an alternative. The American and Chinese software worlds are thus quickly becoming entirely separate universes.

Hardware is moving much more slowly. That is because it is more globally integrated and involves $1trn of physical plant and $400bn of inventories. Later this year Apple will launch a new 5G handset that will still rely on the same vast manufacturing cluster in China that it used five years ago. Even so, the techtonic plates are shifting.

Because of a new set of American restrictions on the use of chipmaking tools put in place in May, Huawei may run out of stock of its specialist chips in early 2021 and will have to scramble to find an alternative.

That will be cumbersome and costly. The SMIC capital-raising shows that China intends to create a chip giant on a par with Intel or Taiwan’s TSMC, although it will take years to do so. If Britain and France both eventually ditch Huawei, they will shift to using Nokia and Ericsson in their networks, which will be expensive and take several years.

If the splintering now seems inevitable, there will be some surprises. One is how the two technospheres of influence are drawn. American policymakers tend to assume the world will use Silicon Valley products, but plenty of countries may ally with China’s tech system or hedge their bets.

India is frosty towards both American and Chinese digital firms and hopes to build up its own champions, although it cannot compete yet in hardware. Another surprise is how much the split could cost. The global listed hardware industry has annual expenses of $600bn, much of which may need to be replicated. Plenty of key firms, including Apple and TSMC, are equally dependent on America and China and have no clear plan to cope with a deeper divide. The tech split is under way. Do not assume it will happen safely.
Newsletter

Related Articles

0:00
0:00
Close
Zelenskyy Signals Progress Toward Ending the War: ‘One of the Hardest Moments in History’ (end of his business model?)
U.S. Issues Alert Declaring Venezuelan Airspace a Hazard Due to Escalating Security Conditions
The U.S. State Department Announces That Mass Migration Constitutes an Existential Threat to Western Civilization and Undermines the Stability of Key American Allies
Students Challenge AI-Driven Teaching at University of Staffordshire
Pikeville Medical Center Partners with UK’s Golisano Children’s Network to Expand Pediatric Care
Germany, France and UK Confirm Full Support for Ukraine in US-Backed Security Plan
UK Low-Traffic Neighbourhoods Face Rising Backlash as Pandemic Schemes Unravel
UK Records Coldest Night of Autumn as Sub-Zero Conditions Sweep the Country
UK at Risk of Losing International Doctors as Workforce Exodus Grows, Regulator Warns
ASU Launches ASU London, Extending Its Innovation Brand to the UK Education Market
UK Prime Minister Keir Starmer to Visit China in January as Diplomatic Reset Accelerates
Google Launches Voluntary Buyouts for UK Staff Amid AI-Driven Company Realignment
UK braces for freezing snap as snow and ice warnings escalate
Majority of UK Novelists Fear AI Could Displace Their Work, Cambridge Study Finds
UK's Carrier Strike Group Achieves Full Operational Capability During NATO Drill in Mediterranean
Trump and Mamdani to Meet at the White House: “The Communist Asked”
Nvidia Again Beats Forecasts, Shares Jump in After-Hours Trading
Wintry Conditions Persist Along UK Coasts After Up to Seven Centimetres of Snow
UK Inflation Eases to 3.6 % in October, Opening Door for Rate Cut
UK Accelerates Munitions Factory Build-Out to Reinforce Warfighting Readiness
UK Consumer Optimism Plunges Ahead of November Budget
A Decade of Innovation Stagnation at Apple: The Cook Era Critique
Caribbean Reparations Commission Seeks ‘Mutually Beneficial’ Justice from UK
EU Insists UK Must Contribute Financially for Access to Electricity Market and Broader Ties
UK to Outlaw Live-Event Ticket Resales Above Face Value
President Donald Trump Hosts Saudi Crown Prince Mohammed bin Salman at White House to Seal Major Defence and Investment Deals
German Entertainment Icons Alice and Ellen Kessler Die Together at Age 89
UK Unveils Sweeping Asylum Reforms with 20-Year Settlement Wait and Conditional Status
UK Orders Twitter Hacker to Repay £4.1 Million Following 2020 High-Profile Breach
Popeyes UK Eyes Century Mark as Fried-Chicken Chain Accelerates Roll-out
Two-thirds of UK nurses report working while unwell amid staffing crisis
Britain to Reform Human-Rights Laws in Sweeping Asylum Policy Overhaul
Nearly Half of Job Losses Under Labour Government Affect UK Youth
UK Chancellor Reeves Eyes High-Value Home Levy in Budget to Raise Tens of Billions
UK Urges Poland to Choose Swedish Submarines in Multi-Billion € Defence Bid
US Border Czar Tom Homan Declares UK No Longer a ‘Friend’ Amid Intelligence Rift
UK Announces Reversal of Income Tax Hike Plans Ahead of Budget
Starmer Faces Mounting Turmoil as Leaked Briefings Ignite Leadership Plot Rumours
UK Commentator Sami Hamdi Returns Home After US Visa Revocation and Detention
UK Eyes Denmark-Style Asylum Rules in Major Migration Shift
UK Signals Intelligence Freeze Amid US Maritime Drug-Strike Campaign
TikTok Awards UK & Ireland 2025 Celebrates Top Creators Including Max Klymenko as Creator of the Year
UK Growth Nearly Stalls at 0.1% in Q3 as Cyberattack Halts Car Production
Apple Denied Permission to Appeal UK App Store Ruling, Faces Over £1bn Liability
UK Chooses Wylfa for First Small Modular Reactors, Drawing Sharp U.S. Objection
Starmer Faces Growing Labour Backlash as Briefing Sparks Authority Crisis
Reform UK Withdraws from BBC Documentary Amid Legal Storm Over Trump Speech Edit
UK Prime Minister Attempts to Reassert Authority Amid Internal Labour Leadership Drama
UK Upholds Firm Rules on Stablecoins to Shield Financial System
Brussels Divided as UK-EU Reset Stalls Over Budget Access
×