Tencent and Baidu had been exploiting a loophole
Taiwan is planning to lock out video streaming services from Chinese tech giants Baidu and Tencent. While such services are ostensibly already illegal in the self-governing island republic, Baidu’s iQiyi and Tencent’s WeTV currently operate under a legal loophole that allowed them to partner with local companies. Now, Taiwan’s Ministry of Economic Affairs says that Taiwanese companies won’t be able to provide these services as of September 3rd.
The move shows how Chinese tech companies are facing increasing difficulty in pushing into other markets as geopolitical tensions continue to rise. President Trump has moved to ban Tencent’s WeChat and ordered ByteDance to divest itself of TikTok’s US operations, while India blocked dozens more Chinese apps earlier this year.
China claims Taiwan as its own territory, and Taiwan doesn’t have official diplomatic relations with most of the world. Its complex political status dates back to the Chinese Civil War, which ultimately led to the Communist party founding the People’s Republic of China on the mainland in 1949 and the Nationalist party retreating to Taiwan. Today, Taiwan is governed as a democratic nation of about 24 million people.
That makes it a potentially significant market for Chinese companies, although the effect of the ban on Baidu and Tencent’s services is unlikely to be too damaging. ICBC analyst Martin Bao tells Nikkei that this move by Taiwan’s government is more about symbolic value.