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Biden’s China Policy? A Balancing Act for a Toxic Relationship

WASHINGTON — In addition to a deadly pandemic and a weakened economy, President-elect Joseph R. Biden Jr. will inherit one more challenge when he takes office in January: a toxic relationship with the world’s second-largest economy.

President Trump has placed tariffs on hundreds of billions of dollars of products from China, imposed sanctions on Chinese companies and restricted Chinese businesses from buying American technology — a multiyear onslaught aimed at forcing Beijing to change its trade practices and as punishment for its authoritarian ways. He shows no sign of letting up in his final days in office: On Thursday, Mr. Trump issued an executive order barring investments in Chinese firms with military ties.

The hard choices for Mr. Biden will include deciding whether to maintain tariffs on about $360 billion worth of Chinese imports, which have raised costs for American businesses and consumers, or whether to relax those levies in exchange for concessions on economic issues, or other fronts, like climate change.

Mr. Biden will need to walk a careful line. He and his advisers view many of Mr. Trump’s measures, which were aimed at severing ties between the Chinese and American economies, as clumsy, costly and unstrategic. They say they want to take a smarter approach that combines working with the Chinese on some issues like global warming and the pandemic, while competing with them on technological leadership and confronting them on other issues like military expansionism, human rights violations or unfair trade.

But even if it departs from Mr. Trump’s punishing approach, the Biden administration will be eager to maintain leverage over China to accomplish its own policy goals. And the new administration will face pressure from lawmakers in both parties who view China as a national security threat and have introduced legislation aimed at penalizing Beijing for its human rights abuses, global influence operations and economic practices.

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Credit…Amr Alfiky/The New York Times

“This is likely going to be a period of continuing uncertainty on the U.S.-China front,” said Myron Brilliant, the executive vice president of the U.S. Chamber of Commerce. “There is no question that President Trump has adopted a tough stance on China, and this probably doesn’t give President-elect Biden a lot of political flexibility early on, but we expect a significant departure in tone, style and process.”

Mr. Biden has given few details about his plans for U.S.-China relations, other than saying he wants to recruit American allies such as Europe and Japan to pressure China to make economic reforms, like protecting intellectual property. He has pledged to devote more resources to enhancing American manufacturing capacity, infrastructure and technological development, to ensure the United States retains an edge over China even as it invests huge sums in fields like telecommunications, artificial intelligence and semiconductors.

But Mr. Biden will face pressure from both parties not to revert to the approach that he and many of his predecessors had earlier embraced in trying to transform China’s economic practices by bringing it into the global economy.

Like many Democrats and Republicans in the 1990s and early 2000s, Mr. Biden argued that integrating China into the global trading system would force Beijing to play by international rules, to the benefit of American workers. In 2000, he voted to grant China permanent normal trading relations, which paved the way for China’s entry into the World Trade Organization and deeper global economic ties.

In 2016, Mr. Trump won the presidency in part by loudly rejecting that approach, arguing that the United States needed to isolate, not integrate, Beijing.

Two decades later, Mr. Biden acknowledges that China exploited the international system, and he has called for a more aggressive approach. Mr. Biden has said the United States must get “tough with China,” and referred to Xi Jinping, the Chinese leader, as a “thug.”

Congress is also relatively unified on taking a tough stance on China. Hundreds of China-related bills are circulating, including several bipartisan efforts that echo Mr. Biden’s emphasis on competing with China by investing in American industries like quantum computing and artificial intelligence.

Mr. Biden’s first moves on China could also be dictated by Mr. Trump’s last months. Many trade experts say they are concerned Mr. Trump, who has promised to make China “pay” for not doing enough to contain the coronavirus, could amp up his economic fight. Several of Mr. Trump’s aides are bitter at China for its role as the source of the coronavirus, which they see as a major contributor to Mr. Trump’s loss, people familiar with their thinking say.

One area of focus is the trade deal that Mr. Trump signed with Chinese officials in January. While China has largely kept commitments to open up its markets to American companies and Mr. Trump’s advisers have continued to defend the pact, Beijing has fallen far behind schedule in its promise to buy an additional $200 billion of goods and services by the end of next year.

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Credit…Pete Marovich for The New York Times

Mr. Trump’s most likely path will be to leave the deal intact, said Chris Rogers, a global trade and logistics analyst at Panjiva. But he wouldn’t rule out “a scorched-earth policy where China is declared to be in violation of its Phase 1 trade deal commitments and there’s a return to tariff escalation. President-elect Biden will be left holding the pieces if the deal is broken,” Mr. Rogers said.

And the president shows no signs of backing off a confrontational approach in other areas. On Nov. 20, his administration is expected to begin economic talks with Taiwan that are likely to rankle Beijing. His advisers are considering other measures to punish China in the coming weeks, including sanctions related to China’s security crackdowns in Hong Kong and Xinjiang, where the Chinese government has carried out mass detentions and harsh policing of ethnic minorities.

“We are worried that he’s going to do some rash things that aren’t going to make sense for the future of the country or global stability,” said Rufus Yerxa, the president of the National Foreign Trade Council, which represents major multinational companies. “Given the history of President Trump’s use of executive authority, we’re taking nothing for granted in these next few months.”

Still, “most of what he could do is through executive orders and executive actions, which can be reversed by a Biden administration,” Mr. Yerxa added.

Whether Mr. Biden opts to roll back Mr. Trump’s more punitive measures will depend, at least in part, on China’s future behavior, including whether it pursues more aggressive incursions into the South China Sea, Taiwan and Hong Kong, people close to his campaign say.

Beijing has recently endorsed a policy of greater technological self-reliance and a stronger military to protect itself from a more antagonistic United States, and moved ahead with cementing other economic partnerships. On Sunday, China signed the Regional Comprehensive Economic Partnership, a pan-Asian trade pact that includes Japan, South Korea, Australia, New Zealand, Thailand, Vietnam and other countries, and will help cement China’s image as the dominant economic power in the region.

Mr. Biden’s appointments for trade and foreign policy posts could help determine his approach toward China, though it remains unclear whom he might nominate for such critical jobs as secretary of state and commerce and the United States trade representative.

Similar to Mr. Biden himself, many of Mr. Biden’s closest advisers have a moderate track record on trade and China, believing they can work with Chinese leaders on some issues even as they challenge them on others. But several of his national security advisers are more skeptical of China.

No matter the path, business groups, economists and others are hoping for a coherent strategy that does not result in the type of economic brinkmanship Mr. Trump appeared to thrive on.

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Credit…Tom Brenner for The New York Times

While Democrats and Republicans have credited Mr. Trump with drawing attention to China’s security threats, and its unfair economic practices like intellectual property theft, his dealings with China have also been transactional and inconsistent. In an attempt to secure a trade deal, Mr. Trump lavished praise on Mr. Xi, delayed sanctions against China’s human rights violations for months, and pardoned the Chinese company ZTE for running afoul of U.S. law. And he has employed racist and xenophobic rhetoric, like calling the coronavirus the “kung flu,” that has fueled attacks on people of Asian descent around the country.

“The Trump administration never did lay out a coherent, comprehensive, engaged trade strategy,” said Thea M. Lee, an economist and the president of the Economic Policy Institute. “It was much more scattershot: Throw up a tariff here, do a deal with China, disparate elements that didn’t seem to talk to each other.”

“But there are a lot of tools in that toolbox, and I would like to see the Biden administration be thoughtful and strategic about how to use them,” Ms. Lee said.

Some experts are urging Mr. Biden to take a more nuanced approach. In a report to be published on Monday, 29 China specialists and other experts, some with close ties to Mr. Biden’s advisers, urge American policymakers to better compete with China by strengthening U.S. research and innovation, preserving the openness of American universities and the economy, and taking a more targeted approach to Chinese security threats.

The working group, organized by the 21st Century China Center at the University of California, San Diego, argues that the United States has allowed its technological leadership over China to erode through a lack of funding in research and development, and overreacted to threats from China in a way that has damaged America’s own economic prospects, including severing economic ties with China, and turning away Chinese students and researchers.

Peter Cowhey, the dean of the School of Global Policy & Strategy at the University of California, San Diego, and chairman of the working group, said its primary takeaway was that the United States “must invest and reorganize the U.S. innovation system across the board, including basic research and development and specialized manufacturing capabilities.”

“It’s a lot easier to manage risks with China if we are in an overall robust period of leadership,” he added.

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China Signs R.C.E.P. Trade Deal. Will Biden Follow?

BEIJING — After eight years of talks, China and 14 other nations from Japan to New Zealand to Myanmar on Sunday formally signed one of the world’s largest regional free trade agreements, a pact shaped by Beijing partly as a counterweight to American influence in the region.

The agreement, the Regional Comprehensive Economic Partnership, or R.C.E.P., is limited in scope. Still, it carries considerable symbolic heft. The pact covers more of humanity — 2.2 billion people — than any previous regional free trade agreement and could help further cement China’s image as the dominant economic power in its neighborhood.

It also comes after a retreat by the United States from sweeping trade deals that reshape global relationships. Nearly four years ago, President Trump pulled the United States out of the Trans-Pacific Partnership, or T.P.P., a broader agreement than the R.C.E.P. that was widely seen as a Washington-led response to China’s growing sway in the Asia-Pacific region. Joseph R. Biden Jr., the president-elect, has been noncommittal on whether he would join the T.P.P.’s successor.

To some trade experts, this new agreement shows that the rest of the world will not wait around for the United States. The European Union has also pursued trade negotiations at an aggressive pace. As other countries sign new deals, American exporters may gradually lose ground.

“While the United States is currently focused on domestic concerns, including the need to fight the pandemic and rebuild its economy and infrastructure, I’m not sure the rest of the world is going to wait until America gets its house in order,” said Jennifer Hillman, a senior fellow for trade and international political economy at the Council on Foreign Relations. “I think there are going to have to be some responsive actions to what China is doing.”

Because of the pandemic, the signing of the agreement on Sunday was unusual, with separate ceremonies held in each of the 15 member countries all linked by video. Each country’s trade minister took turns signing a separate copy of the pact while his or her head of state or head of government stood nearby and watched.

Simultaneously broadcast on a split screen, the different ceremonies offered a glimpse of each country’s political culture. Vietnam, the host nation for the talks this year, and South Korea and Cambodia each had one or two small desktop flags next to their ministers. At the other extreme, China’s ceremony was conducted in front of a wall of five very large, bright red Chinese flags.

Premier Li Keqiang, China’s second-highest official after Xi Jinping, oversaw the Beijing event. In a statement released by the state news media, he called the pact “a victory of multilateralism and free trade.”

The R.C.E.P. encompasses the 10 countries of the Association of Southeast Asian Nations plus Australia, China, Japan, New Zealand and South Korea.

The pact will most likely formalize, rather than remake, business between the countries. The R.C.E.P. eliminates tariffs mainly for goods that already qualify for duty-free treatment under existing free trade agreements. It allows countries to keep tariffs for imports in sectors they regard as especially important or sensitive. The pact’s so-called rules of origin will set common standards for how much of a product must be produced within the region for the final product to qualify for duty-free treatment. These rules could make it simpler for companies to set up supply chains that span several countries.

It has little impact on legal work, accounting or other services that cross borders, and does not venture far into the often-divisive issue of ensuring greater intellectual property protections. The R.C.E.P. also skirts broad issues like protecting independent labor unions and the environment and limiting government subsidies to state-owned enterprises.

Most conspicuously, the pact does not include India, another regional giant. The New Delhi government pulled out of the negotiations in July. China had rebuffed India’s demands for a more ambitious pact that would have done far more to tie together the region’s economies, including trade in services as well as trade in goods.

He Weiwen, a former Commerce Ministry official in Beijing and prominent Chinese trade policy expert, said that the deal nonetheless represented a big step forward.

“The Regional Comprehensive Economic Partnership, due to its size, will certainly contribute to world free trade,” he said.

The agreement’s lower trade barriers could encourage global companies trying to avoid Mr. Trump’s tariffs on Chinese-made goods to keep work in Asia rather than shift it to North America, said Mary Lovely, a senior fellow at the Peterson Institute for International Economics in Washington.

“R.C.E.P. gives foreign companies enhanced flexibility in navigating between the two giants,” she said. “Lower tariffs within the region increases the value of operating within the Asian region, while the uniform rules of origin make it easier to pull production away from the Chinese mainland while retaining that access.”

The prospect of China’s forging closer economic ties with its neighbors has prompted concern in Washington. President Barack Obama’s response was the T.P.P., which had extensive provisions on services, intellectual property, independent labor unions and environmental protection. It also called for limits on state sponsorship of industries, serving as both a challenge to China and an enticement for Beijing to relax its grip on its economy, the world’s second largest.

The T.P.P. did not include China but encompassed many of its biggest trading partners, like Japan and Australia, as well as Chinese neighbors like Vietnam and Malaysia. After President Trump pulled the United States out of that arrangement, the other 11 countries then went ahead with it on their own.

China has been eager to move into that vacuum. Still, it must navigate India’s ambitions. India’s relations with China have deteriorated considerably in recent months amid clashes between troops on their mountainous shared border.

Beijing had initially tried to sway New Delhi into joining the R.C.E.P. However, Indian politicians were leery of lowering their country’s steep tariffs and admitting a further flood of Chinese manufactured goods. China ships $60 billion a year more in goods to India than it receives.

India sought more flexibility to increase tariffs if imports surged. It also sought tariff reductions for low-end, labor-intensive industrial goods for which production has already been moving out of China. But Beijing has been wary of letting high-employment industries like shoe and shirt manufacturing move out of China too quickly.

“As far as India is concerned, we did not join R.C.E.P. as it does not address the outstanding issues and concerns of India,” Riva Ganguly Das, the secretary for Eastern relations at India’s Ministry of External Affairs, said at a news briefing on Thursday.

Still, Ms. Das stressed that India remained interested in deepening trade ties in Southeast Asia.

It is unclear how the United States will respond to the new trade pact. While Mr. Biden is set to assume office in January, trade and China have become fraught issues.

The T.P.P. came under fire from both Republicans and Democrats for exposing American businesses to foreign competition. It remains contentious, and Mr. Biden has not said whether he would rejoin the deal — renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership — once he enters office. But analysts say it is unlikely to be a high priority.

Mr. Biden has said he would wait to negotiate any new trade deals. He wants to focus his energy on the pandemic, the economic recovery and investing in American manufacturing and technology.

Keith Bradsher reported from Beijing and Ana Swanson from Washington. Hari Kumar contributed reporting from New Delhi. Claire Fu contributed research.

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Chinese Reporters in the U.S. Left Uncertain by Political Spat

Yuhui Chai came to the United States from China more than a dozen years ago, drawn by the country’s vibrant democratic values. She eventually found work as a journalist, relishing the chance to pursue hard-hitting stories and ask questions in a manner often discouraged in China’s authoritarian society.

Now Ms. Chai is among more than 100 Chinese news media employees in the United States caught in a heated dispute between Beijing and Washington over the rights of foreign journalists. Unable to secure a long-term visa amid new American restrictions, she has decided to leave her job this week to return to China.

“There’s no way to plan for the future,” said Ms. Chai, a New York-based correspondent who covers technology for SunTV, a Hong Kong news outlet. “It’s very painful.”

As the United States and China fight a broader geopolitical struggle over trade, technology, military policy, the coronavirus and other issues, the news media from both countries are caught in the middle.

The American government has put new limits on the number of employees at Chinese state media organizations, effectively forcing some to leave, and shortened the length of visas for Chinese media workers. China has expelled 17 foreign journalists, including some from The New York Times, and frozen the credentials of several others.

China in particular has long harassed and surveilled foreign journalists on its soil, but the new round of tit-for-tat restrictions risks cutting off a critical source of insight into both Chinese and American societies. American journalists in China have traditionally provided an important window into the country’s opaque government.

Chinese journalists in the United States, especially those working for commercial outlets, can play a role, too. While the majority of Chinese journalists in the United States work for the Chinese government’s flagship news outlets, including Xinhua and China Central Television, others represent more commercially minded organizations that strive to produce in-depth journalism. Though they have to abide by China’s strict censorship rules, they can help balance out the Communist Party’s propaganda machine back home.

The Trump administration says a tough approach is necessary to force Beijing to ease pressure on foreign news outlets. Critics argue the new rules are undermining America’s reputation as a bastion of civil liberties and giving Beijing an excuse to crack down on foreign news outlets even more.

“It has done huge damage to the ideals of freedom of the press and free speech,” said Yik Chan Chin, a lecturer in media and communication studies at the Xi’an Jiaotong-Liverpool University in Suzhou, China. “All these concepts have been significantly damaged during this war.”

Many of the Chinese journalists affected by the new restrictions came to the United States to escape severe controls on the news media in China, where journalists are routinely harassed, punished and imprisoned. Under Xi Jinping, China’s top leader, the government has all but eliminated investigative reporting and demanded media workers show unflinching loyalty to the party.

Now, faced with visa hassles and growing scrutiny of their work in the United States, some are considering changing jobs. Others are making plans to return home, saying in interviews they are tired of being seen as spies and propaganda workers.

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Credit…Andrea Verdelli/Getty Images

The Trump administration has sought to portray Chinese reporters in the United States as foreign agents, designating nine Chinese news organizations as operatives of the Chinese state. David R. Stilwell, a top State Department official, said in a speech last week that workers at state-run outlets “masquerade as legitimate news reporters when their real business is propaganda and espionage.”

Chinese reporters say that portrayal is too simple. The more commercially minded outlets have somewhat more freedom in what they write or broadcast than official government outlets like Xinhua.

“In this age of great divides, it’s more important than ever to hear from more people,” said Du Chen, a reporter for a Chinese technology news site who left the United States earlier this year and has been unable to obtain a visa to return.

Mr. Du said smaller Chinese outlets in the United States have played an important role in dispelling stereotypes. “It still is very crucial to keep these journalists on the ground in U.S.,” he said, “if the U.S. government prefers a meaningful exchange of ideas rather than propaganda wars.”

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Credit…Gilles Sabrié for The New York Times

In a move seemingly aimed at avoiding an escalation, American officials said this week they would allow Chinese journalists whose visas have expired to remain in the United States and apply to have their stays extended. Many are still awaiting word from the Department of Homeland Security on renewal applications they submitted months ago.

China remains angered by a decision from the Trump administration in May to limit visas for Chinese journalists to 90 days, a significant downgrade from the open-ended visas they used to receive. The Chinese Foreign Ministry this week accused the United States of subjecting Chinese journalists to “political persecution and suppression,” and vowed to take retaliatory measures.

China has already stopped renewing press credentials for several foreign reporters still in the mainland, raising the possibility of further expulsions. State-run news outlets have suggested Beijing could seek to impose limits on foreign journalists working in Hong Kong, a former British colony that has traditionally respected press freedoms, if the situation continues to escalate.

American officials, in response, say the Chinese government has ignored their requests to ease pressure on foreign news outlets. They have called on Chinese officials to reinstate reporters from The Wall Street Journal, The Washington Post and The Times who were expelled earlier this year. The expelled reporters have no ties to government institutions or the Trump administration.

“Beijing’s actions prove time and again that the C.C.P. is afraid of independent and investigative media reporting,” a spokesman for the American embassy in Beijing said in a statement this week, referring to the Chinese Communist Party.

An agreement between the United States and China to ease tensions on the news media, while still elusive, could eventually lay the groundwork for more cooperation between the two countries, experts say.

A compromise could help reduce friction between the two countries at a tense moment, said Jerome A. Cohen, a New York University law professor and an expert on China.

“These steps will set the tone for the series of broader compromises that have to be attempted regarding more major issues,” Mr. Cohen said, pointing to climate change, trade, arms control and other challenges.

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Credit…Stephen Crowley/The New York Times

For Chinese journalists, the sharp deterioration in relations has been dispiriting.

Many say they have appreciated the chance to report in a relatively free environment on a variety of contentious issues, such as politics, religion and ethnic divisions — subjects that are typically restricted in China.

“I feel myself breathing again in an open society,” said Helen Zhang, a journalist from China who works in the United States. “Chinese journalism is not dead, but homeless.”

Ms. Chai, the reporter for SunTV, said she is considering leaving journalism once she returns to China, in part because of limits on free speech there. She said she worries the United States is isolating itself by making it harder for foreigners to report in the country.

“The United States should be giving positive messages to those who support democracy and freedom, instead of punishing everyone,” she said. “If your policies are driven by fear, driven by a kind of hostility, that creates very big problems.”

Albee Zhang contributed research.

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In U.S.-China Tech Feud, Taiwan Feels Heat From Both Sides

TAINAN, Taiwan — The United States and China are wrestling to lead the world in artificial intelligence, 5G wireless and other cutting-edge technologies. But the real wizardry that makes those advancements possible is being performed on a yam-shaped island that sits between them, geographically and politically.

On Taiwan’s southern rim, inside an arena-size facility stretched out among lush greenery and coconut palms, colossal machines are manipulating matter at unimaginably tiny scale. A powerful laser vaporizes droplets of molten tin, causing them to emit ultraviolet light. Mirrors focus the light into a beam, which draws features into a silicon wafer with the precision, as one researcher put it, “equivalent to shooting an arrow from Earth to hit an apple placed on the moon.”

The high-performance computer chips that emerge from this process go into the brains of the latest tech products from both sides of the Pacific. Or at least they did until last month, when the Trump administration effectively forced leading chip makers in Taiwan — and elsewhere — to stop taking orders from China’s proudest tech champion, the 5G giant Huawei.

The administration’s stranglehold on Huawei shows that for all of China’s economic progress, the United States still has final say over the technologies without which the modern world could not run. Chip making relies on American tools and know-how, which gives officials in Washington the power of life and death over semiconductor buyers and suppliers anywhere on the planet.

Next in the firing line is China’s most advanced chip producer, Semiconductor Manufacturing International Corporation. The U.S. Department of Commerce told American companies last week that they needed permission to export to SMIC, saying its chips could be used by China’s military. If the administration blocks SMIC from using American software and equipment entirely, it will sharply set back Beijing’s hopes for meeting more of its own semiconductor needs.

That leaves Taiwanese chip companies — including the industry’s leading light, Taiwan Semiconductor Manufacturing Company, which owns the Tainan plant — in a tough spot.

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Credit…Bart Van Overbeeke Fotografie, via Reuters

They are forced to heed the dictates of American tech policy. Yet they can scarcely ignore the fact that so many of their customers and their customers’ customers are in China, where the Communist government is also threatening Taiwan with ever bolder displays of military force. China has for decades claimed the self-governing democracy as part of its territory.

In the high-stakes tech fight, TSMC had been playing Finland: a sometime friend to both feuding giants. But that is not the way the tech world works anymore.

“China has virtually no room for maneuver,” said Pierre Ferragu, the head of technology research at New Street Research. “The U.S. definitely has the upper hand in the struggle.”

Tensions in the Taiwan Strait are rising more broadly this year.

The Trump administration has stepped up official exchanges with Taiwan ever since its president, Tsai Ing-wen, won re-election in January over an opponent who was friendlier to Beijing. In response, Chinese aircraft and warships have menaced the island with growing frequency.

When a State Department representative, Keith Krach, visited Taiwan recently, Ms. Tsai feted him at a banquet alongside a bevy of government dignitaries and TSMC’s retired founder, Morris Chang, a nod to the company’s significance to Taiwan’s relations with the United States.

American officials have taken a great interest in TSMC, whose advanced chips are used in fighter jets and other hardware critical to America’s military edge. The company said this year that it would build a new factory in Arizona, responding to American concerns about overreliance on offshore production.

Now, the Trump administration’s campaign against Huawei has forced TSMC to turn against one of its biggest customers. With the two companies unable to work together without licenses, Huawei may find itself unable to make its late-model handsets, an important chunk of its business, once it uses up its chip inventory.

“I don’t think Huawei has much of a future unless they can find some way to get their suppliers to get export licenses,” said Matt Bryson, an analyst with Wedbush Securities.

One of Huawei’s deputy chairmen, Guo Ping, said last week that the company was assessing its options.

“Survival is our main goal,” Mr. Guo said in Shanghai. “As Alexandre Dumas once said, all of human wisdom is summed up in two words: wait and hope.”

TSMC executives sound confident that Huawei’s plight will not dent it much. If Huawei cannot order chips from the company, then its rivals will instead.

Mark Liu, TSMC’s chairman, said at an industry conference last week that Taiwan would continue improving its technology so American and Chinese companies had no choice but to keep working with the island.

“We are enjoying the success of the past,” Mr. Liu said. But for the future, “we cannot stay where we used to be before.”

TSMC could still get caught in the middle, though, if the U.S. government’s continuing attacks prompt Beijing to strike back.

A full-blown clampdown on sales to SMIC could increase the risk of Chinese retaliation “really significantly,” said Mr. Ferragu of New Street Research. Countermeasures that Beijing might once have considered too self-defeating — such as choking off Qualcomm’s or Apple’s sales in China, effectively depriving Chinese citizens of most high-end smartphones — could start to seem more acceptable.

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Credit…Alex Plavevski/EPA, via Shutterstock

“At this point, it’s really a game of poker,” Mr. Ferragu said. Apple and Qualcomm are both TSMC customers.

For Taiwan, these are not just business questions. China’s reliance on TSMC’s chips has long made people on the island see the company as a bulwark against Chinese military aggression. At its shareholder meeting this summer, an investor, Huang Hsueh-fen, approached the microphone hugging a giant bouquet.

“No matter how serious the pandemic becomes, I must still come offer flowers to the company that is our sacred mountain, protector of the nation,” Ms. Huang said.

Tech workers in Taiwan have a Mandarin rhyme about the young engineers who put in late nights and sacrifice their health for the company: “A hundred thousand youths, a hundred thousand livers, shift by shift TSMC is saving Taiwan.”

So what happens if China stops needing TSMC as much as it does now?

This could happen naturally. TSMC is working at the frontiers of physics to continue doubling the number of transistors it can fit onto a piece of silicon. That principle, known as Moore’s Law, has guided semiconductor development for decades.

Not all tech products today need the most advanced chips, though. Some work best by packaging high-end processors with less sophisticated ones. Simple “internet of things” devices do just fine with simpler chips.

“The way we design chips is changing. It just has to,” said Jay Goldberg, a tech industry consultant and former Qualcomm executive. “Moore’s Law is slowing, and we’re just having to design chips in a way to accommodate that.”

A TSMC spokeswoman, Nina Kao, said demand for the company’s latest production processes was “stronger than ever.”

China could also lessen its dependence on Taiwan by getting better at making chips itself.

Beijing last year created a $30 billion fund for investing in chip projects. In recent months, thousands of Chinese companies have said they are getting into the semiconductor business, according to an analysis by the 21st Century Business Herald, a government-owned newspaper.

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Credit…Taiwan Ministry of Foreign Affairs, via Associated Press

China is trying to poach more Taiwanese talent for the task. Dozens of former TSMC managers and engineers joined two ambitious Chinese chip projects last year, according to a person with knowledge of the matter.

Ms. Kao of TSMC said recent turnover was less than 5 percent, which the company considered a healthy level.

Lin Chih-chieh, a law professor at National Chiao Tung University in Hsinchu, Taiwan, said the island needed stronger laws to keep Taiwanese chip makers’ trade secrets from being spirited away to China.

Still, Ms. Lin said, Taiwan’s chip strengths prevent China from subjugating the island as quickly as it did Hong Kong, where the government has curbed civil liberties.

“At least compared to Hong Kong, we are lucky,” she said. “Hong Kong has no ‘Made in Hong Kong’ products, almost nothing.”

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TikTok’s Proposed Deal Under Review by Trump Administration

WASHINGTON — After more than six weeks, two White House executive orders, new Chinese regulations and multiple bidders, a deal for the social media app TikTok has boiled down to one main strategy: mitigation.

TikTok, which is owned by the Chinese internet company ByteDance, said on Monday that it had offered a proposal to the Treasury Department that aimed to address the Trump administration’s concerns that the app could give the Chinese government access to sensitive data.

The proposal is far from an outright sale of TikTok’s U.S. operations, as President Trump suggested in an Aug. 6 executive order. Instead, ByteDance designed a proposal to alleviate the pressure it was facing from China and the United States and to mollify all sides. Specifically, it structured the deal to satisfy some of Mr. Trump’s concerns while dodging new Chinese regulations that could allow Beijing to block an outright sale of TikTok, people with knowledge of the discussions said.

Under the terms, TikTok would bring on Oracle, a business software firm that is close with the White House, as a “trusted technology partner.” That role could involve Oracle’s handling TikTok user data not just in the United States but also around the world, one person familiar with the matter said.

Oracle would also most likely gain a stake in TikTok, one person with knowledge of the proposal said. While the size of any Oracle investment in TikTok was unclear, Oracle would not be the app’s outright owner, another person said. And TikTok would also not transfer ownership of its valuable recommendation algorithm to Oracle, one person said. Beijing has essentially forbidden such a move.

The exact ownership structure for TikTok was still being debated, but some of ByteDance’s current investors are expected to be shareholders of the app, the people added. The deal would give U.S.-based investors voting control over TikTok, even though they may not own a majority of its shares, one person added. Such an arrangement could address concerns from the Committee on Foreign Investment in the United States, which scrutinizes investments with a foreign entity and makes a distinction between control and ownership of U.S.-based companies.

TikTok would also establish its headquarters in the United States. (It currently has offices in Los Angeles.) With discussions still underway, it’s possible that central details could still change.

The proposal now hinges on gaining the support of Mr. Trump, who previously said he was willing to ban TikTok if the app’s U.S. operations were not sold by a Sept. 20 deadline set by his executive order. Mr. Trump’s advisers, including Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross, seem inclined to accept the kind of deal that ByteDance has offered, people familiar with their thinking said.

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Credit…Ng Han Guan/Associated Press

Mr. Mnuchin and Mr. Ross, who are both playing a prominent role in reviewing ByteDance’s proposal, have come to favor a solution that would reduce national security and data risks by moving some of TikTok’s key operations out of China, rather than killing the company outright, those people said. There are few strong voices in the administration speaking out against such a deal, with the trade adviser Peter Navarro, a China hawk and one of TikTok’s more vocal critics, playing a minimal role in recent discussions.

ByteDance’s carefully designed proposal and the shifting views of Mr. Trump’s advisers indicate how they are more willing to compromise to mitigate an increasingly fractious situation over a video app that is beloved by American teenagers and influencers. On Sunday, ByteDance rejected a deal from Microsoft, in which Microsoft had proposed essentially taking over control of TikTok’s algorithm.

“This way D.C. is happy, Beijing’s happy with no algorithm being sold, and ByteDance and TikTok, along with Oracle, all have smiles on their faces,” said Daniel Ives, a technology analyst at Wedbush Securities. “This is a very tight balancing act for ByteDance because they’re trying to, by the thread of a needle, keep their company as a stand-alone.”

In its statement on Monday, TikTok said the proposal that was in front of the Treasury Department would “enable us to continue supporting our community of 100 million people in the U.S. who love TikTok for connection and entertainment.” Oracle confirmed that it was “part of the proposal submitted by ByteDance to the Treasury Department,” but declined to elaborate.

Mr. Mnuchin described on CNBC on Monday how Oracle would be a “trusted technology partner” for TikTok and said the software company had made “many representations for national security issues.” The White House declined to comment, and the Department of Commerce did not immediately respond to a request for comment.

Other parties may still be interested in participating in a deal. Walmart, which had been working on a TikTok bid with Microsoft, said on Sunday in a statement that it “continues to have an interest in a TikTok investment and continues discussions with ByteDance leadership and other interested parties.”

In China, state media reports said on Monday that ByteDance would not sell TikTok in full to Oracle or any other bidders, suggesting that the company’s valuable algorithm would not trade hands. Last month, Beijing issued regulations that effectively said ByteDance would need a license to sell its technology to an American suitor.

At a regularly scheduled news briefing on Monday, Wang Wenbin, a spokesman for China’s Foreign Ministry, also criticized the American treatment of TikTok.

“TikTok has been rounded up and hunted in the United States, in a classic example of a government-coerced transaction,” Mr. Wang said. “This fully lays bare certain American politicians’ true intentions to seize by force, as well as the ugly face of economic bullying.”

Mr. Trump, who delights in being unpredictable, has a history of surprise decisions in his dealings with China. In recent years, he announced tariffs on hundreds of billions of dollars of products during a trade war and pardoned Chinese companies like ZTE at the request of China’s president, Xi Jinping.

Now he will essentially have to be persuaded to accept the type of compromise that he previously rejected. This summer, TikTok and its investors pressed the administration to allow them to address any concerns over national security by reconfiguring their operations, including moving their headquarters and data storage out of China. But Mr. Trump said no.

It is possible that Mr. Trump will face criticism from China skeptics in both parties if he takes a deal that doesn’t sever TikTok from ByteDance entirely.

In a letter on Monday to Mr. Mnuchin, Senator Josh Hawley, Republican of Missouri, urged the government to reject ByteDance’s proposal. He said ByteDance “can still pursue a full sale of TikTok, its code and its algorithm” to an American company.

“Or perhaps, given constraints imposed by Chinese law, the only feasible way to maintain Americans’ security is to effectively ban the TikTok app in the United States altogether,” Mr. Hawley said.

David McCabe and Ana Swanson reported from Washington, and Erin Griffith from San Francisco. Raymond Zhong contributed reporting from Taipei, Taiwan.

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U.S. Restricts Chinese Apparel and Tech Products, Citing Forced Labor

WASHINGTON — The Trump administration on Monday announced new restrictions on imports of apparel, hair products and technology goods from certain Chinese companies, saying those entities had used forced labor in the Xinjiang region to make their products.

The measure would allow U.S. customs agents to detain and potentially destroy goods brought into the country that are made by the named companies or entities in Xinjiang, a far western region where China has detained as many as a million Uighurs and other ethnic minorities in internment camps and prisons.

While the move is likely to further inflame tensions between the United States and China, it stops short of a more sweeping ban on cotton and tomatoes produced in Xinjiang that the administration was poised to announce last week. That measure had alarmed apparel companies that use Chinese cotton and spurred concern among some administration officials, who were worried it could hurt economic relations with China and prompt possible retaliation on American-grown cotton, according to people familiar with the internal discussions.

In a briefing with reporters on Monday, officials with the Department of Homeland Security said that the broader measure was undergoing further legal analysis, and that more announcements could soon follow.

The so-called withhold release orders announced by Customs and Border Protection on Monday target all products made with labor from the Lop County No. 4 Vocational Skills Education and Training Center in Xinjiang, which provides prison labor to nearby manufacturing entities, the border agency said.

The orders will also restrict hair products made in the Lop County Hair Product Industrial Park, apparel produced by Yili Zhuowan Garment Manufacturing Company and Baoding LYSZD Trade and Business Company, cotton produced and processed by Xinjiang Junggar Cotton and Linen Company, and computer parts made by Hefei Bitland Information Technology Company.

“These extraordinary human rights violations demand an extraordinary response,” Kenneth T. Cuccinelli II, the acting deputy secretary of homeland security, said of China’s actions in Xinjiang. “This is modern-day slavery.”

The economic scope of the order was not immediately clear, and border agency officials declined to specify the dollar value of imports from these companies.

Hefei Bitland has said on its website that its cooperative partners include major technology companies such as Google, HP, Haier, iFlytek and Lenovo. Yili Zhuowan has produced gloves for the French clothing brand Lacoste, according to the Workers Rights Consortium, a nonprofit.

Hefei Bitland “is not a direct supplier to HP,” a spokesperson for HP said in a statement. “We have robust policies in place to protect human rights and prohibit the use of involuntary labor of any kind across our supply chain. We are committed to ensuring everyone in our supply chain is treated with dignity and respect.”

American law bans the importation of any goods produced with forced labor. But human rights groups say the practice has long been widespread in Xinjiang, where many detainees are recruited into programs that assign them to work in factories, on cotton farms or in textile mills.

Xinjiang accounts for about 85 percent of China’s cotton production, according to the U.S. Agriculture Department, and about one-fifth of cotton production globally. Brands including Muji, Uniqlo, Costco, Caterpillar, Lacoste, Ralph Lauren, Tommy Hilfiger and Hugo Boss have been named in reports tying them to Xinjiang factories or materials. Some companies have denied the allegations.

Amid the tensions of President Trump’s trade war and a growing spotlight on human rights abuses in Xinjiang, some major apparel brands have tried to limit their exposure to the region in recent years, including by moving textile and clothing operations to Bangladesh, Indonesia and Vietnam. In July, the sportswear maker Patagonia announced that it was exiting Xinjiang, and that it had told its global suppliers that using fiber made in the region was prohibited.

But human rights groups and industry analysts say supply chains in China remain opaque, allowing companies to profit off involuntary labor by Uighurs and other ethnic Muslims. Travel restrictions in Xinjiang can prevent companies from investigating their supply chains there, and companies that carry out audits of their suppliers may see only what the Chinese factories want them to see.

Concerns about the prevalence of forced labor in these supply chains led Customs and Border Protection to draw up more sweeping restrictions on products made with cotton and fabric from Xinjiang. On the morning of Sept. 8, an agency official told The New York Times that the import bans would cover the supply chains for cotton, from yarn to textiles and apparel made in the Xinjiang Autonomous Region, as well as tomatoes and tomato paste.

But that order was never announced. Officials from the Agriculture Department, the Treasury Department and the U.S. Trade Representative intervened to raise objections about the measure, saying it could threaten American cotton exports to China, or put the trade deal Mr. Trump signed with China in January at risk, people familiar with the matter said.

In their call on Monday, homeland security officials denied that any intervention prompted the delay, saying the legal review had been “driven by the unique nature” of the policy. “We want to make sure that once we proceed that it will stick,” Mr. Cuccinelli said.

Under a withhold release order, importers are still allowed to bring their products into the United States if they are able to provide proof to customs that the goods were not made with forced labor, for example through an extensive audit of the manufacturing facilities, said John Foote, a partner at Baker & McKenzie who specializes in international trade and forced labor issues. If the importer is not able to produce that proof, the product must be sent back, or it is subject to seizure by U.S. customs.

In August, labor and human rights groups including the A.F.L.-C.I.O. and the Uyghur Human Rights Project filed a petition asking Customs and Border Protection to issue a withhold release order on all cotton goods from the Xinjiang region.

“The system of forced labor is so extensive that there is reason to believe that most cotton-based products linked to the Uyghur Region are a product wholly or in part of forced labor,” the petition read.

Customs has issued several withhold release orders in the past against individual companies with ties to Xinjiang, including the Esquel Group, which said it had ties to Ralph Lauren, Tommy Hilfiger, Hugo Boss and Muji; Hetian Taida Apparel Company; and Hero Vast Group. Other entities and people in Xinjiang have been subject to sanctions, including the Xinjiang Production and Construction Corps, an economic and paramilitary group that plays an important role in Xinjiang’s development.

In July, the Departments of State, Treasury, Commerce and Homeland Security issued an advisory jointly warning American companies to monitor their activities in China, particularly in Xinjiang, saying they could face “reputational, economic and legal risks associated with certain types of involvement with entities that engage in human rights abuses.”

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ByteDance’s Need for a TikTok-Oracle Deal: China is Slowing

TikTok’s Chinese owner has fought tooth and nail to keep control over its wildly popular platform for dancing teens and young Los Angeles influencers. One big reason: The days of fast internet fortunes and meteoric digital growth in its home market may be coming to an end.

With Microsoft dropping out of the race to take over TikTok in the United States, Oracle has emerged as the leading contender to save the video app from impending restrictions from the Trump administration. TikTok’s parent company, ByteDance, has chosen the software giant to be its U.S. technology partner, an arrangement that would most likely give Oracle oversight over data on American users.

Speaking on CNBC Monday morning, Treasury Secretary Steven Mnuchin said that government officials would review the proposal by ByteDance and Oracle this week, and then make a recommendation to President Trump. Mr. Mnuchin did not make clear whether Oracle would also buy a majority share in TikTok’s U.S. operations as part of the proposed deal. Mr. Trump had pressed for new ownership of the app as a way to address concerns about potential data gathering by the Chinese government.

Deal talks had been held up after China signaled last month that it would bar TikTok’s technology from being transferred overseas. A partnership with Oracle would probably be more palatable to Beijing, which requires many foreign companies to work with local counterparts to do business in China.

For ByteDance’s founder, Zhang Yiming, the deal could determine whether his eight-year-old company becomes a globe-straddling digital colossus or is reduced to a mere power player in China, where the internet market is maturing and competition is becoming more intense.

Over the past decade, the confluence of engineering talent and commercial opportunity in China minted fortunes that only Silicon Valley’s matched. The country is still a huge market with plenty of spending power, but its economic growth has slowed. Its population of internet users, at 900 million in a country of 1.4 billion, is reaching natural limits. Ninety-nine percent of those people have smartphones on which they already spend pretty much their entire waking lives.

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Credit…Rozette Rago for The New York Times

“For the entire Chinese internet market, there is much less room than there used to be to increase the amount of time spent by users,” said Zhang Xueru, an analyst in Shanghai with 86Research. “Growth in the digital ad market is much slower than before.”

ByteDance declined to comment.

Mr. Zhang of ByteDance believed early on that only by having an international presence could his company compete on the level of Google, Facebook or Amazon. As ByteDance grew, he encouraged employees to adopt what he called a “Martian” perspective on business. He wanted them to think of ByteDance not as a Chinese company gone global, but as an inherently planetwide enterprise, free of national starting points or biases.

Growing wariness toward China’s technological advancements has made that vision look harder to sustain, though. Never before has the United States clamped down on a Chinese company with as much cultural cachet as ByteDance. India banned TikTok in June, also on national security grounds. More European governments are shying away from using Chinese telecommunications equipment, fearful of espionage.

ByteDance’s rivals in China began discovering long ago how hard overseas expansion could be.

The internet giant Tencent is a global heavy hitter in video games through its holdings of developers including Epic Games and Riot Games. It has mostly failed, however, to export its best-known product: WeChat, the company’s Swiss Army knife of an app, which the Trump administration is also threatening to curb. India recently banned the mobile version of the shooter game PlayerUnknown’s Battlegrounds, which Tencent distributes in the country.

China’s other internet behemoth, the e-commerce giant Alibaba, still makes more than 90 percent of its revenue at home despite years of investment in overseas marketplaces. Two of China’s newest tech titans — the shopping site Pinduoduo and the food delivery platform Meituan — are focused heavily on the domestic market.

“Tencent’s businesses are diversified with multiple revenue streams that we expect to generate sustained growth in the years ahead,” the company said in an emailed statement. “The China market continues to offer tremendous opportunities,” the statement said, adding that the company would continue to explore overseas expansion.

Alibaba declined to comment.

ByteDance is hardly a minnow in China. There, TikTok’s sibling app, Douyin, is beloved by advertisers and also helps carry the Communist Party’s propaganda messages. ByteDance now accounts for around one-fifth of online advertising revenue in China, a larger share than Tencent and the search engine Baidu, according to the research firm Bernstein. The country’s online ad market was worth $95 billion last year, according to iResearch.

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Credit…Thomas Suen/Reuters

Grabbing a bigger slice of the pie won’t be easy, even if ByteDance has for years been assembling an armada of other apps aimed at conquering more of China’s two-plus billion eyeballs.

Besides Douyin, it runs two other video apps, Xigua and Huoshan. Its news aggregator, Jinri Toutiao, was its first blockbuster in China and remains a major platform. It is building up its video game and music divisions. It has an e-book app, shopping apps, online learning services, a car buying site, a cloud services platform and an office productivity suite.

“ByteDance has always been very, very enamored with Amazon,” said Rui Ma, an investor and China tech analyst. It and other Chinese internet companies respect “the fact that Amazon can dominate in multiple things,” she said. “It’s also helped by the fact that Jeff Bezos is the richest man on earth.”

In China, ByteDance could still try to use Douyin, which has an estimated 300 million daily users, to herd more people toward its other products — those education apps, for instance.

“Their core user demographic spends eight to 12 hours a day on education, and there are not many large competitors with internet-first business models,” said Turner Novak, a general partner at Gelt Venture Capital who has studied ByteDance’s rise.

Video game companies are big advertisers on Douyin and TikTok, Mr. Novak noted, which suggests that ByteDance could make lots of money by advertising its own games on those platforms as well.

Conquering online retail might be trickier. ByteDance is already trying to turn Douyin into a mobile-age Home Shopping Network, a place where kindly looking people entrance viewers into buying things. Not everyone is convinced.

“E-commerce is not only about traffic,” said Shawn Yang, an analyst in Shenzhen with the investment bank Blue Lotus Capital Advisors. “E-commerce is also about service, about product quality, about logistics, payments. The whole process is very long, which means that it’s not as easy as online gaming or advertising.”

Even serving up videos that are longer than the bite-size ones that fill Douyin and TikTok might require more of ByteDance than an algorithm that intuits viewers’ tastes with uncanny accuracy.

“Netflix used to say that its recommendation technology was a core asset,” said Ms. Zhang of 86Research. “But in fact, long-form video platforms still need hits. The platforms need big shows to bring in users. So actually, recommendation technology isn’t especially important compared to content.”

For now, ByteDance may find the most success building upon what it already knows best. One path might be to use brief, punchy videos as a medium not just for entertainment, but for learning or even hiring and dating.

Eugene Wei, a tech executive and angel investor in San Francisco, has argued that short videos are uniquely suited to a recommendation engine like TikTok’s. Unlike news articles such as this one, TikTok’s user-made videos are easy to create and easy to consume, so people generate huge quantities of data about their tastes simply by using the app. ByteDance runs the data back into its systems to improve its recommendations, which keep people even more glued to the app.

The result, in Mr. Wei’s words: “a rapid, hyper-efficient matchmaker” akin to the magic Sorting Hat in “Harry Potter.”

“You need some creativity to adapt short video” to new business areas, Mr. Wei acknowledged in an interview. “But the fact that ByteDance already walked that path once means you just believe it more the next time around.”

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Oracle Chosen as TikTok’s Tech Partner, as Microsoft’s Bid Is Rejected

WASHINGTON — The Chinese owner of TikTok has chosen Oracle to be the app’s technology partner for its U.S. operations and has rejected an acquisition offer from Microsoft, according to Microsoft officials and other people involved in the negotiations, as time runs out on an executive order from President Trump threatening to ban the popular app unless its American operations are sold.

It was unclear whether TikTok’s choice of Oracle as a technology partner would mean that Oracle would also take a majority ownership stake of the social media app, the people involved in the negotiations said. Microsoft had been seen as the American technology company with the deepest pockets to buy TikTok’s U.S. operations from its parent company, ByteDance, and with the greatest ability to address national security concerns that led to Mr. Trump’s order.

“ByteDance let us know today they would not be selling TikTok’s U.S. operations to Microsoft,” Microsoft said in a statement. “We are confident our proposal would have been good for TikTok’s users, while protecting national security interests.”

ByteDance declined to comment. A spokeswoman for Oracle did not immediately respond to a request for comment.

The fast-moving series of events on Sunday came as the clock ticks down on the executive order from Mr. Trump, which said that TikTok essentially needed to strike a deal to sell its U.S. operations by Sept. 20 or risk being blocked in the United States. But sale talks had been in a holding pattern because China issued new regulations last month that would bar TikTok from transferring its technology to a foreign buyer without explicit permission from the Chinese government. And any resulting deal could still be a geopolitical piñata between the United States and China.

The Chinese regulations helped scuttle the bid by Microsoft. The software giant had said in August that it would insist on a series of protections that would essentially give it control of the computer code that TikTok uses for the American and many other English-speaking versions of the app.

Microsoft said the only way it could both protect the privacy of TikTok users in the United States and prevent Beijing from using the app as a venue for disinformation was to take over that computer code, and the algorithms that determine what videos are seen by the 100 million Americans who use it each month.

“We would have made significant changes to ensure the service met the highest standards for security, privacy, online safety and combating disinformation,” Microsoft said in its statement.

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Credit…Tom Brenner/Reuters

Oracle has said nothing publicly about what it would do with TikTok’s underlying technology, which is written by a Chinese engineering team in Beijing — and which Secretary of State Mike Pompeo has charged is answerable to Chinese intelligence agencies. That is a major concern of American intelligence agencies, led by the National Security Agency and United States Cyber Command, which warned internally that whoever controls the computer code could channel — or censor — a range of politically sensitive information to specific users.

ByteDance and TikTok have denied that they help the Chinese government.

TikTok has become the latest flash point between Washington and Beijing over the control of technology that affects American lives. The Trump administration had already banned the Chinese telecom giant Huawei from selling next-generation, or 5G, networks and equipment in the United States, citing the risk of a foreign power controlling the infrastructure on which all internet communications flow.

But TikTok took the battle in new directions. For the first time, the United States was trying to stop a Chinese cultural phenomenon, with an intense following among American teenagers and millennials, which carries with it the possibility of future influence.

Even if Oracle may try to close a deal, it is unclear whether Beijing would create new obstacles to the process. And election-year politics have hung over the negotiations from the start. Unlike many other technology companies, Oracle has cultivated close ties with the Trump administration. Its founder, Larry Ellison, hosted a fund-raiser for Mr. Trump this year, and its chief executive, Safra Catz, served on the president’s transition team and has frequently visited the White House.

Last month, Mr. Trump said he would support Oracle buying TikTok. He called Oracle a “great company” and said the firm, which specializes in enterprise software, could successfully run TikTok.

“I think that Oracle would be certainly somebody that could handle it,” he said.

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Credit…Rozette Rago for The New York Times

Along with Amazon, Oracle tried to win a $10 billion contract to run the Pentagon’s cloud services, one of the most hotly contested technology contracts issued by the Trump administration. Microsoft ultimately won that.

Oracle was also poised to provide the administration with a system earlier this year to help with a planned study that would have enabled the wide release of the malaria drug hydroxychloroquine to treat Covid-19. While doctors had warned the drug could have dangerous side effects, Mr. Trump had promoted its possible use to treat patients infected by the coronavirus.

Oracle’s relationship with the administration has drawn scrutiny. In August, a Department of Labor whistle-blower said that Mr. Trump’s labor secretary, Eugene Scalia, had intervened in a pay discrimination case involving the company.

On a call to discuss Oracle’s earnings last week, Ms. Catz preemptively told analysts that she and Mr. Ellison would not discuss reports about their bid for TikTok.

The rise of TikTok in the United States has been remarkably rapid; it has taken off in just the past two years. ByteDance, founded in 2012, has raised billions of dollars in funding, valuing it at $100 billion, according to PitchBook, which tracks private companies. Its investors include Tiger Global Management, KKR, NEA, SoftBank’s Vision Fund and GGV Capital.

In July, as pressure from the U.S. government escalated, ByteDance began discussions with investors to carve out TikTok.

But the deal quickly become a free-for-all with bids from various corporations and investment entities around the world and new demands from the U.S. and Chinese governments.

As the deal progressed, two of ByteDance’s largest backers, Sequoia Capital and General Atlantic, have sought to retain their holdings in its valuable subsidiary while saving TikTok from a ban in the United States. Both firms are represented on ByteDance’s board of directors.

In late August the firms teamed up with Oracle to bid against Microsoft. Microsoft, meanwhile, teamed up with Walmart to make its bid.

In an interview, Brad Smith, Microsoft’s president and chief legal officer, said that as he studied TikTok, it became evident that there were two distinct potential security threats.

The first was that Chinese authorities, using existing and new national security laws, could order TikTok to turn over user data. TikTok tracks everything that its hundreds of millions of users watch to funnel them more videos and other material. Given that users cannot opt out of that tracking, the only solution would be to move the data on Americans to servers that are solely in the United States, Mr. Smith said.

(TikTok currently uses a major server in Virginia, but backs up some of its data in Singapore, and there are questions about whether Chinese authorities could reach into any of those huge pools of user data.)

Microsoft would have located that data in the United States — and, in all likelihood, so would Oracle.

“Then Microsoft engineers began to see a second potential vulnerability: disinformation,” Mr. Smith said, one that has also been identified by Australian researchers. The only way to assure that TikTok’s Chinese engineers were not designing code and algorithms to affect what users saw, or did not see, would be for Microsoft to take over the code and the algorithms.

“We proposed to control the data sets and the algorithms from the day of the acquisition, including by moving source code for the algorithms to the United States,” Mr. Smith said.

Microsoft then would have worked over the course of a year with TikTok’s Chinese engineers so that it would vet any subsequent changes and make them reviewable by the U.S. government for security purposes before it was released into production, he said.

That is the approach favored by the National Security Agency and the Pentagon, according to intelligence officials. But it is exactly what the Chinese object to, which Beijing made clear in its new regulations last month.

David E. Sanger and David McCabe reported from Washington; Erin Griffith reported from San Francisco.

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U.S. May Ban Cotton From Xinjiang Region of China Over Rights Concerns

WASHINGTON — The Trump administration is weighing a ban on some or all products made with cotton from the Xinjiang region of China, a move that could come as soon as Tuesday as the United States looks to punish Beijing over alleged human rights violations, three people familiar with the matter said.

The potential ban, which could affect a wide range of apparel and other products, comes amid widespread concerns about the use of forced labor in Xinjiang, where China has carried out a crackdown against mostly Muslim minorities, including a campaign of mass detentions.

The scope of the order remains unclear, including whether it would cover all cotton products shipped from Xinjiang or China, or potentially extend to items that contain Xinjiang cotton and are shipped from third countries.

But any move to block cotton imports could have huge implications for global apparel makers. Xinjiang is a major source of cotton, textiles, petrochemicals and other goods that feed into Chinese factories. Many of the world’s largest and best-known clothing brands rely on supply chains that extend into China, including using cotton and textiles produced in Xinjiang, in the country’s far west.

Studies and news reports have documented how groups of people in Xinjiang, especially the largely Muslim Uighur and Kazakh minorities, have been recruited into programs that assign them to work in factories, cotton farms, textile mills and menial jobs in cities.

President Trump has taken a harder stance toward China as the presidential election approaches, blaming Beijing for allowing the coronavirus to spread around the world and ravage the American economy. The Trump administration has steadily ramped up its pressure on China in recent months, placing sanctions on dozens of companies and individuals over alleged human rights violations in Xinjiang and national security risks.

The new ban could produce a stampede out of China for major apparel brands. Amid a prolonged trade war and rising tensions between the United States and China, many companies have looked to relocate apparel supply chains to countries like Vietnam, Bangladesh and Indonesia. But some have found China’s quality production hard to replicate, or faced fierce competition for factory space.

The measure, called a withhold release order, would be issued by U.S. Customs and Border Protection. The agency has in the past issued such bans against individual companies it suspected of using forced labor in Xinjiang, but it has been weighing more sweeping action against a broader category of goods. Customs and Border Protection did not immediately respond to a request for comment.

In July, the Trump administration placed several apparel companies on a blacklist that prevented them from buying American products, citing their use of forced labor in Xinjiang. The list included reported current or former suppliers to major international apparel brands, such as Ralph Lauren, Tommy Hilfiger and Hugo Boss. Several of the listed Chinese companies and the major international brands they supply pushed back against those measures, saying they had found no evidence of forced labor or other abuses in their supply chains.

Companies caught up in the debate over whether their products are made with forced labor say the opaque nature of Chinese supply chains can make it difficult to trace exactly where cotton is sourced.

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Forget TikTok. China’s Powerhouse App Is WeChat.

Just after the 2016 presidential election in the United States, Joanne Li realized the app that connected her to fellow Chinese immigrants had disconnected her from reality.

Everything she saw on the Chinese app, WeChat, indicated Donald J. Trump was an admired leader and impressive businessman. She believed it was the unquestioned consensus on the newly elected American president. “But then I started talking to some foreigners about him, non-Chinese,” she said. “I was totally confused.”

She began to read more widely, and Ms. Li, who lived in Toronto at the time, increasingly found WeChat filled with gossip, conspiracy theories and outright lies. One article claimed Prime Minister Justin Trudeau of Canada planned to legalize hard drugs. Another rumor purported that Canada had begun selling marijuana in grocery stores. A post from a news account in Shanghai warned Chinese people to take care lest they accidentally bring the drug back from Canada and get arrested.

She also questioned what was being said about China. When a top Huawei executive was arrested in Canada in 2018, articles from foreign news media were quickly censored on WeChat. Her Chinese friends both inside and outside China began to say that Canada had no justice, which contradicted her own experience. “All of a sudden I discovered talking to others about the issue didn’t make sense,” Ms. Li said. “It felt like if I only watched Chinese media, all of my thoughts would be different.”

Ms. Li had little choice but to take the bad with the good. Built to be everything for everyone, WeChat is indispensable.

For most Chinese people in China, WeChat is a sort of all-in-one app: a way to swap stories, talk to old classmates, pay bills, coordinate with co-workers, post envy-inducing vacation photos, buy stuff and get news. For the millions of members of China’s diaspora, it is the bridge that links them to the trappings of home, from family chatter to food photos.

Woven through it all is the ever more muscular surveillance and propaganda of the Chinese Communist Party. As WeChat has become ubiquitous, it has become a powerful tool of social control, a way for Chinese authorities to guide and police what people say, whom they talk to and what they read.

It has even extended Beijing’s reach beyond its borders. When secret police issue threats abroad, they often do so on WeChat. When military researchers working undercover in the United States needed to talk to China’s embassies, they used WeChat, according to court documents. The party coordinates via WeChat with members studying overseas.

As a cornerstone of China’s surveillance state, WeChat is now considered a national security threat in the United States. The Trump administration has proposed banning WeChat outright, along with the Chinese short video app TikTok. Overnight, two of China’s biggest internet innovations became a new front in the sprawling tech standoff between China and the United States.

While the two apps are lumped in the same category by the Trump administration, they represent two distinct approaches to the Great Firewall that blocks Chinese access to foreign websites.

The hipper, better-known TikTok was designed for the wild world outside of China’s cloistering censorship; it exists only beyond China’s borders. By hiving off an independent app to win over global users, TikTok’s owner, ByteDance, created the best bet any Chinese start-up has had to compete with the internet giants in the West. The separation of TikTok from its cousin apps in China, along with deep popularity, has fed corporate campaigns in the United States to save it, even as Beijing potentially upended any deals by labeling its core technology a national security priority.

Though WeChat has different rules for users inside and outside of China, it remains a single, unified social network spanning China’s Great Firewall. In that sense, it has helped bring Chinese censorship to the world. A ban would cut dead millions of conversations between family and friends, a reason one group has filed a lawsuit to block the Trump administration’s efforts. It would also be an easy victory for American policymakers seeking to push back against China’s techno-authoritarian overreach.

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Credit…The New York Times

Ms. Li felt the whipcrack of China’s internet controls firsthand when she returned to China in 2018 to take a real estate job. After her experience overseas, she sought to balance her news diet with groups that shared articles on world events. As the coronavirus spread in early 2020 and China’s relations with countries around the world strained, she posted an article on WeChat from the U.S. government-run Radio Free Asia about the deterioration of Chinese-Canadian diplomacy, a piece that would have been censored.

The next day, four police officers showed up at her family’s apartment. They carried guns and riot shields.

“My mother was terrified,” she said. “She turned white when she saw them.”

The police officers took Ms. Li, along with her phone and computer, to the local police station. She said they manacled her legs to a restraining device known as a tiger chair for questioning. They asked repeatedly about the article and her WeChat contacts overseas before locking her in a barred cell for the night.

Twice she was released, only to be dragged back to the station for fresh interrogation sessions. Ms. Li said an officer even insisted China had freedom of speech protections as he questioned her over what she had said online. “I didn’t say anything,” she said. “I just thought, what is your freedom of speech? Is it the freedom to drag me down to the police station and keep me night after sleepless night interrogating me?”

Finally, the police forced her to write out a confession and vow of support for China, then let her go.

WeChat started out as a simple copycat. Its parent, the Chinese internet giant Tencent, had built an enormous user base on a chat app designed for personal computers. But a new generation of mobile chat apps threatened to upset its hold over the way young Chinese talked to one another.

The visionary Tencent engineer Allen Zhang fired off a message to the company founder, Pony Ma, concerned that they weren’t keeping up. The missive led to a new mandate, and Mr. Zhang fashioned a digital Swiss Army knife that became a necessity for daily life in China. WeChat piggybacked on the popularity of the other online platforms run by Tencent, combining payments, e-commerce and social media into a single service.

It became a hit, eventually eclipsing the apps that inspired WeChat. And Tencent, which made billions in profits from the online games piped into its disparate platforms, now had a way to make money off nearly every aspect of a person’s digital identity — by serving ads, selling stuff, processing payments and facilitating services like food delivery.

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Credit…Wu Hong/EPA

The tech world inside and outside of China marveled. Tencent rival Alibaba scrambled to come up with its own product to compete. Silicon Valley studied the ways it mixed services and followed its cues.

Built for China’s closed world of internet services, WeChat’s only failure came outside the Great Firewall. Tencent made a big marketing push overseas, even hiring the soccer player Lionel Messi as a spokesman in some markets. For non-China users, it created a separate set of rules. International accounts would not face direct censorship and data would be stored on servers overseas.

But WeChat didn’t have the same appeal without the many services available only in China. It looked more prosaic outside the country, like any other chat app. The main overseas users, in the end, would be the Chinese diaspora.

Tencent did not respond to a request for comment.

Over time, the distinctions between the Chinese and international app have mattered less. Chinese people who create accounts within China, but then leave, carry with them a censored and monitored account. If international users chat with users inside China, their posts can be censored.

For news and gossip, most comes from WeChat users inside China and spreads out to the world. Whereas most social networks have myriad filter bubbles that reinforce different biases, WeChat is dominated by one super-filter bubble, and it hews closely to the official propaganda narratives.

“The filter bubbles on WeChat have nothing to do with algorithms — they come from China’s closed internet ecosystem and censorship. That makes them worse than other social media,” said Fang Kecheng, a professor in the School of Journalism and Communications at the Chinese University of Hong Kong.

Mr. Fang first noticed the limitations of WeChat in 2018 as a graduate student at the University of Pennsylvania, teaching an online course in media literacy to younger Chinese.

Soft-spoken and steeped in the media echo chambers of the United States and China, Mr. Fang expected to reach mostly curious Chinese inside China. An unexpected group dialed into the classes: Chinese immigrants and expatriates living in the United States, Canada and elsewhere.

“It seemed obvious. Because they were all outside China, it should be easy for them to gain an understanding of foreign media. In their day-to-day life they would see it and read it,” Mr. Fang said. “I realized it wasn’t the case. They were outside of China, but their media environment was still entirely inside China, their channel for information was all from public accounts on WeChat.”

Mr. Fang’s six-week online courses were inspired by a WeChat account he ran called News Lab that sought to teach readers about journalism. With his courses, he assigned articles from media like Reuters along with work sheets that taught students to analyze the pieces — pushing them to draw distinctions between pundit commentary and primary sourcing.

During one course in 2019, he focused on the fire at Notre-Dame cathedral in Paris, which inspired many conspiracy theories on WeChat. One professor at the prestigious Tsinghua University reposted an article alleging that Muslims were behind the fire, which was untrue.

The classes were a big draw. In 2018, Mr. Fang attracted 500 students. The next year he got 1,300. In 2020, a year of coronavirus rumors and censorship, Tencent took down his News Lab account. He decided it was not safe to teach the class on another platform given the more “hostile” climate toward foreign media.

Still, he said that blocking WeChat would be unlikely to help much, as users could easily switch to other Chinese apps filled with propaganda and rumors. A better idea would be to create rules that force social media companies like Tencent to be more transparent, he said.

Creating such internet blocks, he said, rarely improved the quality of information.

“Information is like water. Water quality can be improved, but without any flow, water easily grows fetid,” he said.

In a class in 2019, he warned broadly about barriers to information flow.

“Now, the walls are getting higher and higher. The ability to see the outside has become ever harder,” he said. “Not just in China, but in much of the world.”

When Ferkat Jawdat’s mother disappeared into China’s sprawling system of re-education camps to indoctrinate Uighurs, his WeChat became a kind of memorial.

The app might have been used as evidence against her. But he, like many Uighurs, found himself opening WeChat again and again. It contained years of photos and conversations with his mother. It also held a remote hope he clung to, that one day she would again reach out.

When against all odds she did, the secret police followed.

If propaganda and censorship have found their way to WeChat users overseas, so too has China’s government.

For ethnic minority Uighurs, who have been targeted by draconian digital controls at home in China, the chat app has become a conduit for threats from Chinese security forces. In court documents, the Federal Bureau of Investigation said China’s embassies communicated on WeChat with military researchers who had entered the United States to steal scientific research. The Chinese Communist Party has used it to keep up ties and organize overseas members, including foreign-exchange students.

Not all uses are nefarious. During the pandemic, local governments used the app to update residents traveling and living abroad about the virus. China’s embassies use it to issue travel warnings.

While the Chinese government could use any chat app, WeChat has advantages. Police know well its surveillance capabilities. Within China most accounts are linked to the real identity of users.

Mr. Jawdat’s mother, sick and worn, was released from the camps in the summer of 2019. Chinese police gave her a phone and signed her into WeChat. At the sound of his mother’s voice Mr. Jawdat fought back a flood of emotions. He hadn’t been sure if she was even alive. Despite the relief, he noticed something was off. She offered stilted words of praise for the Chinese Communist Party.

Then the police reached out to him. They approached him with an anonymous friend request over WeChat. When he accepted, a man introduced himself as a high-ranking officer in China’s security forces in the Xinjiang region, the epicenter of re-education camps. The man had a proposal. If Mr. Jawdat, an American citizen and Uighur activist, would quiet his attempts to raise awareness about the camps, then his mother might be given a passport and allowed to join her family in the United States.

“It was a kind of threat,” he said. “I stayed quiet for two or three weeks, just to see what he did.”

It all came to nothing. After turning down a media interview and skipping a speaking event, Mr. Jawdat grew impatient and confronted the man. “He started threatening me, saying, ‘You’re only one person going against the superpower. Compared to China, you are nothing.’”

The experience gave Mr. Jawdat little tolerance for the app that made the threats possible, even if it had been his only line to his mother. He said he knew two other Uighur Americans who had similar experiences. Accounts from others point to similar occurrences around the world.

“I don’t know if it’s karma or justice served, for the Chinese people to also feel the pain of what it’s like to lose contact with your family members,” Mr. Jawdat said of the proposed ban by the Trump administration. “There are many Chinese officials who have their kids in the U.S. WeChat must be one of the tools they use to keep in contact. If they feel this pain, maybe they can relate better to the Uighurs.”

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Credit…Jacquelyn Martin/Associated Press

Ms. Li was late to the WeChat party. Away in Toronto when it exploded in popularity, she joined only in 2013, after her sister’s repeated urging.

It opened up a new world for her. Not in China, but in Canada.

She found people nearby similar to her. Many of her Chinese friends were on it. They found restaurants nearly as good as those at home and explored the city together. One public account set up by a Chinese immigrant organized activities. It kindled more than a few romances. “It was incredibly fun to be on WeChat,” she recalled.

Now the app reminds her of jail. During questioning, police told her that a surveillance system, which they called Skynet, flagged the link she shared. Sharing a name with the A.I. from the Terminator movies, Skynet is a real-life techno-policing system, one of several Beijing has spent billions to create.

The surveillance push has supported a fast-growing force of internet police. The group prowls services like WeChat for posts deemed politically sensitive, anything from a link to a joke mocking leader Xi Jinping. To handle WeChat’s hundreds of millions of users and their conversations, software analyzes keywords, links and images to generate leads.

Although Ms. Li registered her account in Canada, she fell under Chinese rules when she was back in China. Even outside of China, traffic on WeChat appears to be feeding these automated systems of control. A report from Citizen Lab, a University of Toronto-based research group, showed that Tencent surveilled images and files sent by WeChat users outside of China to help train its censorship algorithms within China. In effect, even when overseas users of WeChat are not being censored, the app learns from them how to better censor.

Wary of falling into automated traps, Ms. Li now writes with typos. Instead of referring directly to police, she uses a pun she invented, calling them golden forks. She no longer shares links from news sites outside of WeChat and holds back her inclination to talk politics.

Still, to be free she would have to delete WeChat, and she can’t do that. As the coronavirus crisis struck China, her family used it to coordinate food orders during lockdowns. She also needs a local government health code featured on the app to use public transport or enter stores.

“I want to switch to other chat apps, but there’s no way,” she said.

“If there were a real alternative I would change, but WeChat is terrible because there is no alternative. It’s too closely tied to life. For shopping, paying, for work, you have to use it,” she said. “If you jump to another app, then you are alone.”

Lin Qiqing contributed research.