Silicon Valley Wakes Up to Its Hong Kong Conundrum

Here’s a paradox: Why did the passage of a sweeping new security law in Hong Kong prompt TikTok, a Chinese video service, to announce it was pulling out of the territory, while U.S. tech giants Microsoft Corp., Twitter Inc., Facebook Inc. and Alphabet Inc.’s Google remain, though they said they would no longer process data requests from authorities?

These moves tell us two things: Silicon Valley is waking up to the conundrum it faces in Hong Kong, if not facing it head on, and TikTok doesn’t want to be seen as Chinese. Remember that TikTok is the overseas version of short-video service DouYin, both of which are fully owned by ByteDance Inc. — which is itself Chinese and based in Beijing.

How did we get here? After passing a new law in Hong Kong last week, Beijing has sweeping power to prosecute what it perceives to be national security threats. Having had barely a week to read and understand the text of the law, companies globally are struggling to deal with the new reality. And here is what they should assume: Hong Kong is pretty much China.