Non-State Actress #16: The Chinese Communist Party, Regina George, and the 3rd Velociraptor in Jurassic Park
Look for a guy in finance and ask him if raptors are capable of learning.
Welcome to Non-State Actress written by me, Maggie Feldman-Piltch . Our last issue, ‘A Good Moisturizer and Getting Banned from TikTok‘ talks about skincare and the TikTok debate. It also comes with a follow up video - ‘Tiktok, Tech, and a Good Moisturizer’.
We also have a special Memorial Day Edition of the NSA: The Podcast featuring Jessie Piltch-Loeb.
BLUF
The US has required the sale of popular apps owned in part by the Chinese Communist Party before - and with relatively little fanfare. Why is TikTok different? Because the CCP is basically Regina George and the 3rd velociraptor from Jurassic Park.
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Everything You Need to Know About Communism, China, and Communism in China
Jk. This is far from everything1.
This edition started as an explanation of the Committee on Foreign Investment in the United States (CFIUS), Grindr, and why the data privacy concerns around TikTok are both super real and super beyond *only* TikTok.
But, in true Maggie Fashion, I realized I was starting too far in for it to be useful let alone fun to read.
So before we go there, let’s start here…
China is ruled by the Chinese Communist Party - the CCP for short. We’re not really talking about the core tenents of Communism today, but we’re also not NOT talking about them so I do want to make sure we have enough familiarity for any of this to make sense.
So here is a three sentence definition of an entire view of society over which wars have been fought2:
Communism, credited to German political theorist Karl Marx, is a type of government and economic system in which all property that has or can be used to create value (aka the means of production) is owned by the governing body. The governing body is then responsible for distributing wealth. Chances are, there’s a Tortured Coffee Shop Barista, gender irrelevant, from your past for whom communism was The Way…as long as it came with oat milk3.
Some things to know:
Communism requires a strong central power (government, usually) with wide-spread authority and control to make decisions on behalf of individuals and groups. Basically, the central power is supposed to decide what is in the best interest of the whole group and create and enforce outcomes accordingly…like Regina George. For comparison, democracy requires a weaker central power (again, usually government) that responds to the wants and whims of individuals and groups in an effort to achieve the outcome that is best for all…like Miss Frizzle.
The Chinese Communist Revolution, led by Mao Zedong, established the People’s Republic of China (PRC) with the Communist Chinese Party (CCP) at its helm in 1949. Prior to 1949, China was governed by foreign powers, dynastic powers, national parties, and sometimes all three at once. Here’s a preliminary timeline offering an overview of ~3600 years of Chinese governing…which like, lol.
The Republic of China (ROC) is absolutely not the same thing as the People’s Republic of China (PRC). The ROC does have another name though - Taiwan. And you’ll have to come back for more on that…later.
The CCP started to allow for private or ‘not-entirely-state-owned’ enterprises in 1988. As those companies have grown, so has the CCP’s clearly stated beliefs that these organizations should (in 1992’s Charter) and then must (in 2018) have internal Party infrastructure aka Party Units. This is meant to ensure the company, and its employees, operate in consensus with the Party and the Party can operate within the company.
If you’re not sure what to make of this, imagine if the US government operated under a legally enforced single-party system, owned a portion of all US-based companies, and then had an official office within each company. Yeah, the vibes are weird.
What do you need to know for the rest of this to make sense?
Communism doesn’t allow for private companies, but in order for a communist China to exist in the modern world the CCP had to find a way to Make It Work (Tim Gunn voice, obvi). In 2018 the CCP began requiring private companies in China to embed a Party Unit within the organization, and we’re going to talk about how that works and what it means.
The CCP is Kind of Like Regina George
In 2013, the CCP started taking what the Party termed ‘special management shares’ of ownership in any China-based enterprise it wanted to as part of the Party Unit thing we talked about. First media companies, then Alibaba, cybersecurity companies, gaming companies, and now a LOT of mobile app and commerce companies4. In 2018, this practice became a requirement.
The Finance Bro - 6’5 or not - in your life refers to this as a Golden Share, but I like to call it the Regina George Share. Both because I think it more accurately communicates the vibes and because gold is too pretty to be associated with authoritarianism and I am personally committed to restoring its reputation.
Anyway.
While only a tiny fraction of total ownership, the Regina George Share, or RGS, is less about the percentage and more about the power (this might be a good opportunity to revisit last year’s Instruments of National Power summary). Sound like someone you went to Middle School with yet?
It may only be 1% of the total, but if the holder of that 1% is powerful enough it doesn’t matter. And the CCP is definitely powerful, just like Regina George. And again, weird vibes.
Sure, the RGS does translate to some direct voting impact in the same way Regina George was only one-third of The Plastics, but we also know Regina had way more power, influence, and control than Gretchen and Karen. And Gretchen and Karen had way more power, influence, and control than most - but only because Regina gave it to them.
The Rules were written and enforced by Regina, with help from those who supported, enabled, and feared her. And the repercussions for breaking those rules went far beyond that day Gretchen wore a vest. Just ask Janice.
Despite being only one person, Regina set up a system of norms that gave her the life she wanted. She leached off everyone’s resources and insecurities to centralize social power and then used that power to reinforce a system that benefited her. She offered proximity to her own power and popularity (something people decided they definitely needed) in exchange for total submission.
Those who stepped out of line, Plastics or otherwise, paid the price. She was hated, feared, and envied all at once - even by those closest to her - because being in was better than being out.
If Regina George was a country, you could imagine her saying or at least clearly implying something like “I will build roads, power lines, sewer systems, and water purification systems for your population and you will let me use them. And when we disagree, I will turn them off. Or destroy them.”
Psychotic? Sure. And if you asked the people of Sudan, Nigeria, Algeria, Brazil, Cuba, Venezuela, and lots of other places it would sound eerily familiar.
Regina at Home and Studying Abroad
Power and influence is literally the point of the CCP’s legally-required Regina George Share. We know that because the CCP says so, and because that’s how national power works, and because we know what happens when someone tries to refuse the CCP…which we’re seeing it right now here in the US.
And WOW is it working.
How do we know it’s working? Because Regina, I mean the CCP, is learning.
Tales of Survival: Grindr
The movement to force the sale of TikTok so its ownership completely excludes the Chinese Communist Party is not the first of its kind - but the confusion and outrage around the push is new and that’s kind of scary.
In 2016, Chinese gaming company Kunlun Tech Co. bought the majority stake in Grindr, a queer dating app, for about $93 million and completed a total buy-out of the app in 2018. During that time, the app’s popularity skyrocketed and so did serious international privacy concerns. Concerns that had real consequences.
In April 2018, a Norwegian research non-profit SINTEF found Grindr was sharing the HIV status of its users with third parties without the user’s consent. Coupled with the data the app collected like phone IDs, GPS data, and email addresses SINTEF’s research (then confirmed by Buzzfeed reporting and Grindr) made linking HIV status to specific users without their consent pretty easy5. Shortly after, the Norwegian Consumer Council filed three separate complaints about Grindr sharing user’s data with adtech companies and others in violation of the European Union’s General Data Privacy Regulation (GDPR)6.
As the number of users and data privacy violations rose, the US’ Committee on Foreign Investment in the United States aka CFIUS (more on this later) took notice.
Grindr became a hugely popular dating and hook-up app for queer men after the sale and CFIUS identified serious data privacy concerns for app users and their contacts that in the aggregate posed a meaningful risk to US national security
In 2019, the US government’s Committee on Foreign Investment in the United States (CFIUS), forced the Chinese gaming company Kunlun Tech Co. to sell its app Grindr.
Kunlun Tech sold Gindr for $608.5 million dollars, more than 6x what it originally purchased the app for only 3 years prior. So, like, they’re probably over it. And Grindr? Still flourishing…if that is possible on/as a dating app.
Life/Regina Finds A Way
Remember when the beautiful, perfect, exceptional, brilliant Laura Dern played Dr. Ellie Sattler in Jurassic Park?
Remember when she said we didn’t need to worry about the third velociraptor unless it learned to open doors? And then the velociraptor opened the door?
Well friends, the velociraptor is at the door and its messing with the handle.
See, the required sale of Grindr was a relative blip in the news landscape. There was very little outcry about supposed US-government overreach, there was no meaningfully effective campaign convincing people Grindr was about to be banned, and people generally got it… if they cared at all. Kunlun Gaming didn’t seem to put up much of a fight judging by the fact that the first news stories on the subject all make clear the company was already looking for buyers.
Worse than The Burn Book
It’s true that there are WAY more TikTok users in 2024 than Grindr users in 2018. It is also true TikTok users are more diverse than Grindr users so more segments of society think they will be negatively impacted, and that the form and function of the apps are different. These differences certainly play a role in why more people are paying attention - but it doesn’t easily explain why the exact same kind of concerns are resulting in a massive, multi-media, multi-pronged effort to misinformation campaign telling people TikTok is about to be banned.
The deal on the table requires the China-based company which owns Bytedance - TikTok’s parent company - to sell *at market value*, just like Kunlun Gaming and Grindr. TikTok’s owners say no dice. So the question is why is TikTok more valuable to its ownership than than its actual valuation?
And if TikTok is as wonderful and harmless and useful as its owners say it is, why is it banned in China by the very organization that owns it?
These are important questions, and ones we’ve started to answer in earlier posts and videos, and the most recent podcast, but not the core of today’s discussion. We’ll come back to it another day.
TikTok was built and is run to be deeply embedded into a huge number of American’s daily lives not simply for the vibes but for the constant stream of data and information it generates. It *buries* the Burn Book.
Its proprietary algorithm - the thing showing you what you want to see before you even know the thing exists - doesn’t just help you learn about the world. That algorithm enables TikTok to learn about you and everyone else. And that, my friends, is how the velociraptor learned to open the door.
The reason there is widespread obsession with the “banning of TikTok7” and uniformity of opinion and emotional response in a society infamous for being anything close to in agreement with itself is because we taught the CCP and the company it in part owns how to engage, unite, and deploy us in support of the campaign.
Wrap Up
It can be tricky to write these TikTok-focused pieces without it sounding like a one-sided attempt to get everyone to agree with me, especially because I am literally an expert in information and influence and I can’t help but see the Red Flags.
However, Non-State Actress is not about what I think - it is about what I know, and making that information interesting, relevant, and important for other people. And I really know what I’m talking about here.
The concerns raised over TikTok is not about the app’s existence. The concerns are about how the app collects information, stores that information, shares that information, and uses that information. The concerns are about what entities control TikTok directly and indirectly and what that means for how and why the app functions.
Don’t believe me?
Think back to when we talked about the CCP’s Regina George Shares and I suggested you imagine what it would be like if the US government did the same thing - purchased a portion of US-based companies and set up an official US government office within the entity. Red flags abound. And again I say - all those red flags are not for decoration!
The Committee on Foreign Investment in the United States is investigating more transactions than it has in the past - but there are also more transactions occurring. Importantly, this gentle upward trend is consistent regardless of of who is serving as President and the vast majority of the process is accessible to members of the public8 910.
If you didn’t know Grindr used to be owned by a Chinese-based, CCP-partially owned company until the US forced it to be sold for market value because multiple international organizations and governments were deeply concerned by how user’s information was deployed, now you do.
And if you didn’t know that, or knew and didn’t care before but suddenly do now - I beg you to ask yourself why, and ask the CCP why an app they’ve banned in China is worth more than any amount of money to them in America.
Gimme More: Special Edition
1992 Communist Party Charter - If you’re on GoogleChrome, it will translate it into English for you.
Chinese Communist Party Website in English - This is a CCP controlled website.
Tianamen at 35 - The Ongoing Struggle for Human Rights in China - Select Committee on Chinese Communist Party, US Congress
China and Taiwan: A Simple Guide - BBC, January 2024
Mainland Affairs Council, Republic of China (Taiwan) - Official Taiwanese government website.
Why China-Taiwan Relations Are So Tense - Backgrounder, Council on Foreign Relations, February 2024
China still wants to control Big Tech. It’s just pulling different strings - CNN, January 2023.
Grindr exposed user’s HIV status to two other companies - The Verge, April 2018.
SINTEF - Homepage, Norwegian non-profit
Firm Seeks to Sell Grindr Due to National Security Risks - Reuters, March 2019
Why is the U.S forcing a Chinese company to sell the gay dating app Grindr? - Monkey Cage Blog - Washington Post, April 2019.
Grindr Will Be Auctioned Due to National Security Concerns - The Advocate, May 2019.
CFIUS - Homepage, US Department of Treasury.
The Committee on Foreign Investment in the United States - Fact sheet - Congressional Research Service, February 2020.
Obviously this is not EVERYTHING you need to know about a nation with thousands of years of history and a major political theory.
Don’t worry, we’ll do a primer on types of government at some point. For now, check out the Gimme More section.
This is a joke, but also not a joke.
https://www.cnn.com/2023/01/27/tech/china-golden-shares-tech-regulatory-control-intl-hnk/index.html
https://www.theverge.com/2018/4/2/17188922/grindr-hiv-status-privacy-data
https://www.theverge.com/2020/1/14/21065481/grindr-gdpr-data-sharing-complaint-advertising-mopub-match-group-okcupid-tinder
Reminder, TikTok is not at risk of being banned
https://sgp.fas.org/crs/natsec/RL33388.pdf
https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfius
https://home.treasury.gov/policy-issues/international/the-committee-on-foreign-investment-in-the-united-states-cfius/cfius-reports-and-tables
I just learned a ton and had fun learning -- so a sincere thank you to Non-State Actress!