[EAI Working Paper] Post-COVID World Political Economy Order Series ②_ Digital Platform Competition in the Era of Non-Contact: The Complex Geopolitics of US-China Technological Hegemony Competition

I. Introduction

The unfolding of the COVID-19 pandemic has had multifaceted impacts on international politics, with its effect on the US-China hegemony competition being the most prominent. The conflict between the two nations intensified with disputes over responsibility for the origin of COVID-19, and each side also showcased the superiority of its system in responding to the crisis. Furthermore, both countries engaged in a leadership competition during the global response to the COVID-19 crisis. Beneath this US-China conflict, competition in the security and economic sectors, which will determine the future strength of nations, has been ongoing. In particular, the US-China conflict, evident in cybersecurity and trade/tariffs, has gradually expanded into the realm of advanced technologies. Against the backdrop of the non-contact environment created by the COVID-19 crisis, the ongoing US-China technological hegemony competition is evolving into a digital platform competition.

Since the 2010s, the US-China conflict surrounding advanced technologies has evolved through several turning points. While more related to cyber conflict than technological competition, the primary issue in the US-China conflict in the early to mid-2010s was the 'threat of Chinese hackers.' Following the inauguration of the Trump administration, the focus of the US-China conflict shifted to economic and trade issues, leading to the 'threat of Chinese Information and Communication Technology (ICT) products.' Trade conflicts unfolded under the pretext of cybersecurity, with the import restrictions on Huawei's 5G communication equipment and the subsequent global supply chain conflict being key issues. By mid-2019, the transnational movement of data and sovereign control over it showed signs of becoming a heated issue. In this evolutionary journey, the COVID-19 pandemic in 2020 accelerated the US-China digital platform competition that was already underway.

Discussions on US-China digital platform competition began in the 2000s with computer operating systems (OS) and shifted to internet search in the 2010s. In the late 2010s, the infrastructure platform created by the introduction of 5G became a focal point. Around the same time, cloud computing emerged as a key issue as a data platform for the digital economy, and by 2020, platform competition across online services became a subject of controversy. These expanding trends are expected to continue in areas such as fintech, including mobile payments, and digital currencies in a broader sense, and are also anticipated to connect with the e-commerce sector. This trend seemed to culminate in 2020 with the US government's raising of concerns regarding social media and digital content companies such as ByteDance's TikTok and Tencent's WeChat.

This paper examines the evolution of the US-China technological hegemony competition from the perspective of the rise of digital platform competition against the backdrop of a non-contact environment facilitated by digital transformation. While US Big Tech companies have dominated digital platforms thus far, Chinese platform companies have recently pioneered new models in some areas. While early platform competition was characterized by Chinese government measures to regulate US companies like Microsoft and Google, recent attention has been drawn to US government actions to sanction Chinese companies such as Huawei, Tencent, Alibaba, and ByteDance. Chinese companies are no longer confined to the domestic market but are expanding into the global market, exploring the potential of 'China Platforms'.

This US-China digital platform competition should be understood as a 'competition between nations,' not just between US and Chinese companies, with both governments actively involved. Recent variables include trade, sovereignty, policy, law, institutions, nationalism, alliances, diplomacy, international norms, and warfare. Indeed, the developments in these technological and economic sectors have manifested as global supply chain decoupling since the Trump administration, amplified by competition in alliance diplomacy, and show the potential to evolve into a competition of values and norms under the Biden administration. These actions are also linked to concerns about the 'Splinternet' or decoupling of the digital world order, which have been discussed recently. From this perspective, the current digital platform competition between the US and China strongly exhibits geopolitical characteristics, or more precisely, a complex geopolitical landscape that reinterprets classical geopolitics.

This paper is broadly divided into three parts. Chapter II examines the rise of the non-contact environment, accelerated by digital transformation in the COVID-19 era, and introduces the concept of complex geopolitics of platform competition used in this paper. Chapter III analyzes the evolution of digital platform competition across four layers: 5G infrastructure and mobile, Artificial Intelligence (AI) algorithms and cloud/data, digital media and content, and e-commerce and fintech platforms. The primary focus was on the platform power of the US and the conflicts arising from China's challenges in each layer. Chapter IV examines the US-China technological hegemony competition, viewed through the lens of complex geopolitics, as the competition between individual platform companies escalates to a national level. It focuses on the decoupling phenomena emerging in areas such as global supply chains, alliance diplomacy, norms/values, and the digital world order. Finally, the conclusion summarizes the paper's arguments and briefly discusses the direction of digital platform strategies for South Korea.

II. Understanding Non-Contact Environments and Platform Competition

1. Digital Transformation and the Rise of Non-Contact Environments

The COVID-19 pandemic has accelerated digital transformation. The term 'digital transformation' first appeared in the late 1990s, referring to the 'transformation' of traditional social structures by applying 'digital' technologies across society. Primarily used in the business domain, digital transformation implies a broad application across all aspects of corporate management, leading to changes in business models, unlike limited technological innovations. Recently, it has also come to signify a Great Transformation of society as a whole, extending beyond the business realm. Along with COVID-19, the global industry is going 'all-in' on digital transformation, creating a sense of urgency that failure to seize this golden opportunity in the era of the Fourth Industrial Revolution will lead to market obsolescence. In this regard, digital transformation is becoming an essential strategy and a new paradigm for corporate or national survival.

Digital transformation is closely linked to the development of the Fourth Industrial Revolution. The advancement of 'digital technologies'—such as mechanization in the First Industrial Revolution, industrialization in the Second, informatization in the Third, and intelligentization in the Fourth—is the key variable driving 'transformation.' Intelligent digital technologies like artificial intelligence, machine learning, the Internet of Things (IoT), big data, cloud computing, and robotics possess the potential to fundamentally change 'ways of working.' These changes are leading to discussions about systemic shocks and transformations across the entire social system. Companies and nations are striving to enhance productivity, gain competitive advantages in the market, and secure future national power by leveraging digital technologies. While digital transformation had been maturing as a trend for a long time, COVID-19 created a new environment that made the adoption of this transformation unavoidable and accelerated.

In particular, the non-contact environment, utilizing digital technologies, has rapidly emerged due to social distancing measures necessitated by the COVID-19 pandemic. The adoption of remote work has led to a surge in non-contact economic activities such as online shopping, delivery orders, and online banking. Online companies like Google and Netflix, and especially video conferencing platforms like Zoom, have seen significant growth. The perception is spreading that even companies in traditional manufacturing sectors, not just ICT firms, must transition to online services to survive. Even after the COVID-19 pandemic subsides, an increase in online-based non-contact activities and a rapid transition to a digital and non-contact economy are expected. Beyond the non-contact economy, the advent of a more comprehensive non-contact society is also foreseen, with the introduction of remote healthcare, remote lectures, decision-making through video conferencing, non-contact parliamentary activities and election campaigns, and increased international diplomatic activities via video conferencing.

2. Complex Geopolitics of Platform Competition

The term 'platform' literally means a flat stage, signifying a space where people can gather. A 'digital platform' is 'a space that mediates transactions between suppliers and demanders online.' With the continuous development of digital technologies, existing online services have evolved into digital platforms, enabling suppliers and demanders to interact in various ways without direct contact, simply by following the rules set by the platform. In this process, digital platform operators design the rules of interaction and wield a type of 'platform power' that differs from traditional notions of power. Underlying this power is the 'network effect,' where the value of a platform increases with the number of users participating on it (Seol Jin-ah & Choi Eun-kyung 2018). This paper focuses on the US-China technological hegemony competition for this platform power on a global scale.[1]

US Big Tech companies have dominated digital platforms. Microsoft, Google, Apple, Facebook, Twitter, and Amazon are prime examples, often referred to by acronyms like TGiF, GAFA, FANG, or MAGA. Chinese companies such as Baidu, Alibaba, Tencent, and Huawei have also grown significantly, sometimes referred to as BAT or BATH. Initially, they formed competitive alignments in specific sectors, such as Google vs. Baidu, Apple vs. Huawei, Facebook vs. Tencent, and Amazon vs. Alibaba. However, recently, the business scope of these companies has expanded, their battlefronts have crossed, and all-out competition is underway. Furthermore, the entry of new platform companies like Netflix from the US and ByteDance from China has made the competitive landscape increasingly complex (Galloway 2017; Tanaka Michiaki 2019).

Particularly noteworthy is the remarkable progress of Chinese platform companies. The Chinese market has become a breeding ground for various platform businesses, including e-commerce, fintech, and SNS, based on mobile technology. The platform businesses of Alibaba and Tencent, in particular, play a significant role in the operation of China's vast socio-economic system, extending beyond their respective sectors. Moreover, these Chinese platform businesses, which once merely copied US models, are now pioneering new leading models in some areas. It is also important to note that they are no longer confined to the Chinese domestic market but are expanding globally. The potential of these 'China Platforms' is underpinned by the network effect derived from the massive scale of the Chinese market (Yoon Jae-woong 2020; Yoo Han-na 2021).

This digital platform competition should be understood as a 'competition between nations,' not just between US and Chinese companies, with both governments actively involved. Recent variables include trade, sovereignty, policy, law, institutions, nationalism, alliances, diplomacy, international norms, and warfare (Mori 2019). Cross-border digital trade is a contentious issue, central bank digital currencies are becoming problematic, and cyber alliance diplomacy is causing controversy. Global value chains are being reshaped beyond the national level, and even the internet shows signs of geopolitical division. These phenomena are not merely techno-economic but geopolitical. This is not to advocate a return to classical geopolitics, the paradigm of the past. Rather, it is to consider phenomena targeted by other theoretical perspectives such as non-geopolitics, critical geopolitics, and post-geopolitics in a comprehensive manner (Kim Sang-bae 2018).

Indeed, the US-China technological hegemony competition, and by extension, the digital platform competition, operates through the mechanisms of complex geopolitics. From a non-geopolitical perspective, competition in 5G infrastructure platforms and COVID-19 vaccines has led to the decoupling of global supply chains related to technological competition in the semiconductor and bio-pharmaceutical industries, which are geared towards the global market. This has been linked to issues of alliances and diplomacy, perennial themes in classical geopolitics, such as the US's Indo-Pacific strategy and China's Belt and Road Initiative. Furthermore, values and norms, discussed in constructivist critical geopolitics, have also become important elements in US-China digital platform competition. These phenomena are unfolding against the backdrop of cyberspace, a post-geopolitical space, and are recently manifesting as platform competition, typified by the rise of the Splinternet and the decoupling of the digital world order.

III. US-China Digital Platform Competition in the Era of Non-Contact

1. Competition in 5G Infrastructure and Mobile Platforms

1) 5G Infrastructure Platform Competition

Competition in building digital infrastructure for the non-contact environment in the COVID-19 era is actively underway, with the US-China competition in the 5G sector being the most representative example. Huawei, a Chinese company, is a leader in 5G technology, holding the top position in the global telecommunications equipment market with a 28% share as of 2017. In response to Huawei's technological offensive, the US imposed sanctions under the pretext of cybersecurity. Seizing this opportunity, the US announced its '5G Security National Strategy' in March 2020, aiming to secure leadership in the 5G sector. However, while the US hesitated in 5G investment due to the impact of COVID-19, China, having stabilized first, accelerated its domestic 5G network construction with the goal of building 500,000 5G base stations in 2020 (Oh Il-seok 2020).

While cybersecurity concerns regarding the Chinese telecommunications equipment provider Huawei have been raised in the US for a long time, it only escalated into a diplomatic issue between the US and China in 2018. In February 2018, US intelligence agencies, including the Central Intelligence Agency (CIA), Federal Bureau of Investigation (FBI), and National Security Agency (NSA), issued warnings against using Huawei products. In August, the US National Defense Authorization Act decided to exclude Huawei from government procurement. By December, the arrest of Meng Wanzhou, the eldest daughter of Huawei's founder and its Vice President and CFO, occurred. In early 2019, the US engaged in diplomatic efforts to pressure its allies not to adopt Huawei products. In May, President Trump declared a state of national emergency through an executive order, demanding that even private companies cease transactions with Huawei.

The technological pursuit by Chinese companies, represented by Huawei, was perceived as a threat to US technological hegemony in the 5G era. The issue was that Huawei emerged aggressively in the race to dominate 5G technology standards before the US was adequately prepared (Johnson and Groll 2019). Huawei leveraged its strategy of growing its scale through low-price competition during the 4G LTE era and then enhancing its technological capabilities based on increased volume, reaching a level of technological prowess that was 20-30% cheaper than competitors. As of 2018, Huawei held a 28% share of the global mobile communication equipment market, ranking first worldwide. While the alliance of Ericsson and Cisco possessed core technologies, they hesitated due to the lack of a developed market. Huawei, with the support of the Chinese government, concentrated initial investments and reaped the 'first-mover advantage' (Won Byung-chul 2018).

In this context, the US emphasized that the Huawei issue should be viewed from a national security perspective, not just an industrial one. The argument was that sensitive US national security data could be leaked through backdoors embedded in Huawei products. In this regard, the Huawei issue was framed as a 'real threat,' and based on this discourse, sanctions against Huawei were intensified both domestically and internationally. In response, Huawei and the Chinese government countered with the argument that the US government's suspicions and concerns about Huawei products lacked objective grounds and that the US was subjectively exaggerating the threat to achieve other hidden agendas. The 'war of words' between the US and China over Huawei's cybersecurity issues exemplified the typical pattern of securitization concerning future security threats.

2) Mobile Platform Competition

Unlike the 5G infrastructure equipment sector, the mobile operating system (OS) platform for mobile devices is dominated by US companies. As of December 2020, Google's Android held a 72.48% share in the global mobile OS market, and Apple's iOS held 26.91%. The combined market share of these two companies exceeds 99%. Even in the Chinese market, Android's share is over 80%, and iOS's share is 19%. Despite China's multifaceted efforts to develop its own OS, only Xiaomi's proprietary OS, MIUI, which is Android-based, has managed to maintain a distinct Chinese identity. For China, the world's largest smartphone market, this is a regrettable situation, and the desire for independent OS development is growing as the number of mobile device users in the Chinese market increases.

In August 2019, Huawei unveiled 'Hongmeng 2.0,' its proprietary mobile OS compatible with Android apps, and announced plans to release smartphones running on Hongmeng starting in 2020. Huawei had been developing Hongmeng for a long time in anticipation of US sanctions, intending to prepare for a situation where it could no longer use Android normally as the Huawei situation escalated. Huawei's adoption of Hongmeng is not merely a matter of changing the OS but of building a new mobile ecosystem. If Huawei's proprietary OS, when released, cannot support core Google services like Gmail, YouTube, and the Play Store, it could be rejected by users worldwide or in China (Wang Chenglu 2021).

US companies also hold an overwhelming advantage in the mobile app store platform competition. Apple has built a powerful platform, the Apple App Store, where developers worldwide sell apps to its smartphone users. Based on this, Apple has created an ecosystem that maximizes content revenue and enhances user purchasing loyalty by structuring the value chain of mobile OS and app stores. The structure where app developers pay Apple a 30% commission on sales from the App Store has generated enormous profits for Apple. Like Apple, Google also operates a mobile app store platform. Android phone users download apps from Google Play, operated by Google. Google also receives a 30% commission on apps sold or in-app purchases made through Google Play. While apps available on iOS can only be downloaded from the Apple App Store, apps running on Android can be downloaded from sources other than Google Play. Thus, Google has not built as strong an ecosystem in app sales as Apple.

Another reason Apple generates more revenue from its app store ecosystem than Google is its access to the Chinese market. Approximately half of the revenue generated by the Apple App Store comes from China (<Newsis> 2020/6/18). A significant factor in Apple's success has been the absence of Google Play in China since Google's withdrawal in 2010. Android phones distributed in China are equipped with proprietary OSs based on the 'Android Open Source Project (AOSP),' which provides only the core Android OS functionalities, not other Google services.

Following Google's sudden withdrawal from the Chinese market, making Google Play unavailable, Chinese smartphone manufacturers had to operate their own app stores. Chinese app developers also had to develop apps for various app stores instead of Google Play. In this context, it is noteworthy that in early 2020, four major Chinese smartphone companies—Xiaomi, Huawei, Oppo, and Vivo—embarked on developing their own app store platform called the Global Developer Service Alliance (GDSA). The participation of multiple Chinese companies in GDSA is reportedly due to the growing perception that the US-China conflict could extend its impact beyond Huawei to other companies.

2. Competition in Artificial Intelligence (AI) and Data Platforms

1) AI Algorithm Platform Competition

Discussions on US-China digital platform competition gained momentum with the spread of the internet. The internet search sector, dominated by Google, is a prime early example of internet platform competition. However, Google faced difficulties entering the Chinese market. Ultimately, in January 2010, Google announced its withdrawal from the Chinese market. Baidu, a Chinese search engine company, filled the void left by Google, establishing a dominant position with a market share of 70-80%. Leveraging its strong data competitiveness accumulated through search services, Baidu is engaged in various internet services that combine AI data.

Today, building platforms based on AI algorithm design capabilities is crucial for internet services (Lee Seung-hoon 2016). US companies, known as GAFA, are leading this new form of competition. China, centered around Baidu, Alibaba, and Tencent, is pursuing national objectives by dividing research projects among individual companies, in addition to their independent R&D efforts. In 2017, the Chinese Ministry of Science and Technology officially formalized this model by selecting Baidu, Alibaba, Tencent, and iFlytek as 'Open Innovation Platforms for the New Generation AI.' Accordingly, Baidu is developing autonomous vehicles, Alibaba is focusing on smart cities, Tencent is working on medical imaging, and iFlytek is developing smart voice recognition.

It is important to understand the strategic differences between the US and China in this AI platform competition. The US approaches this by fostering an open AI ecosystem centered around private companies, allowing anyone to participate. The US primarily leads in conceptual design and invests heavily in this area, while adopting an open strategy for the remaining stages to defend against rivals and collaborate with global AI talent. In contrast, China aims to emulate the US AI ecosystem while developing its own independent ecosystem based on its vast domestic market, under the premise of not being dependent on the US AI ecosystem (Kim Jun-yeon 2020).

Considering the recent trend of AI converging with the IT industry as a whole, beyond specific sectors, the competition between the US and China is expected to evolve into a new phase. Looking at the US IT companies joining the competition with China, companies like Google, Microsoft, and Amazon are building platforms that span across different industrial and service domains. Therefore, their strategies are not limited to individual technology competition or competition within specific industrial sectors but aim for platform competition that encompasses almost all industries and services. In a broader sense, their competition is expected to escalate beyond mere technological hegemony competition to a comprehensive competition for future national power, and further to a competition of policies, institutions, and systems that support it.

Indeed, this policy-institution-system competition in the AI field is evident in the differing stances of the US and China on AI regulation principles. While the AI regulation principles of the US and China are largely similar in their stated objectives, their interpretations of each other's practices in the development and application of AI differ, creating potential for friction and conflict over AI regulation policies and ethical guidelines. While the US emphasizes voluntary regulation that prioritizes human rights and personal data protection, China emphasizes harmony and cooperation for the proper governance of artificial intelligence. These differences can be exploited by factors such as mutual distrust and differences in beliefs between the two countries to lead interpretations in a direction favorable to each nation.

This difference recently surfaced with the controversy surrounding China's facial recognition AI. In October 2019, the Trump administration placed 20 local governments and 8 companies in China's Xinjiang Uyghur Autonomous Region on a blacklist, citing human rights abuses and opposition to US national security and foreign policy. This list included leading Chinese AI companies such as SenseTime, Megvii, and Yitu. China's facial recognition technology and intelligent surveillance systems are rapidly being exported worldwide. In particular, China is investing heavily in Belt and Road Initiative participating countries, simultaneously implanting its communication networks and surveillance systems.

2) Cloud and Data Platform Competition

In digital platform competition, analyzing accumulated data using artificial intelligence is crucial. Cloud computing serves as the infrastructure for storing this data. Amazon Web Services (AWS), launched by Amazon in 2002, is a pioneer in this field. Subsequently, interest from US companies and the government has also increased. In 2010, the US federal government adopted the 'Cloud First' policy as a priority initiative for IT improvement. Later, in 2017, the US government mandated the transition of all information systems to a cloud-based infrastructure, also adopting the more stringent 'Cloud Only' policy.

The global cloud market is dominated by a triumvirate of Amazon's AWS, Microsoft's Azure, and Google Cloud Platform. In 2019, their respective market shares were 32.3%, 16.9%, and 5.8%, with a combined share of 55%. More importantly, their combined market share is steadily increasing (Hwang Sun-myung et al. 2020). In the cloud market as well, Chinese companies like Alibaba and Tencent are rapidly growing and catching up. The Chinese government's serious engagement in cloud industry development began after fostering cloud businesses following the announcement of the '3-Year Action Plan for Cloud Development (2017-19)' as part of 'Made in China 2025' (Ministry of Industry and Information Technology of the People's Republic of China, 2017).

The US-China cloud conflict has also escalated to the government level, with the transnational flow of data being raised as an agenda item at the G20 Summit in Osaka in June 2019. While the US advocates for the transnational flow of data, prioritizing the interests of its big data companies, China views data as a national asset and fundamentally argues for restricting the transnational movement of data (Kang Ha-yeon 2020). In particular, by emphasizing the concept of data sovereignty, China aims to protect the data of its companies and citizens, and to enhance the vitality and capacity for utilization of data flow. It intends to expand 'Data Localization' policies, characterized by local data storage and prohibitions on cross-border data transfer (Liu 2020).

Based on this logic, the Chinese government restricts the market entry of US cloud companies in its domestic market. For a long time, the US has demanded broad opening of the Chinese IT market, including the cloud computing market. In China, to operate a cloud computing business, a joint venture with a Chinese company must be established, which leads to technology transfer to the Chinese partner, making market entry practically impossible, according to many complaints. In contrast, complaints have also been raised that Chinese companies, including Alibaba, China's largest e-commerce company, operate freely in the US market (Choi Pil-soo, Lee Hee-ok, & Lee Hyun-tae 2020).

Furthermore, following the Huawei incident, the Chinese government has moved to enact legislation to strengthen data security. In July 2020, following the implementation of the 'Hong Kong National Security Law,' China began drafting a 'Data Security Law' primarily focused on strict management of data handled by government and corporate entities. This law reportedly includes provisions allowing for retaliatory measures against other countries that impose discriminatory actions on China regarding data usage. Provisions considering the conflict with the US have also been added. It allows for corresponding retaliatory measures if foreign governments or other entities impose discriminatory restrictions or prohibitions on China concerning the use of data in investment and trade.

The US response to this was evident in its emphasis on 'Clean Cloud' as part of the Clean Network program in August 2020. Then-Secretary of State Mike Pompeo urged the expulsion of 'untrusted Chinese technology companies,' following Huawei, Tencent, and TikTok, and specifically mentioned Alibaba's cloud services. Pompeo stated, 'We will protect Americans' most sensitive personal information and our companies' most valuable intellectual property, including our COVID-19 vaccine research, from being accessed on cloud-based systems operated by companies like Alibaba, Baidu, China Mobile, China Telecom, and Tencent' (Ha Man-ju 2020).

3. Competition in Digital Media and Content Platforms

1) Digital Media Platform Competition

Facebook, a quintessential platform, succeeded by attracting people to its platform, collecting data, and displaying optimized advertisements for revenue. Based on this, it also expanded into businesses like Instagram, Messenger, WhatsApp, and Oculus. However, China has banned the use of major foreign social media platforms such as Facebook, YouTube, and Twitter within its borders since 2003. Tencent capitalized on this gap in the Chinese market. Tencent's greatest asset is WeChat, a social messaging app with over a billion users. Tencent's WeChat is not just a simple mobile messaging app; it is a 'super app' that offers almost all services accessible via smartphone. Beyond this, Tencent engages in a wide range of businesses, including providing digital content such as games, financial services like payments, participation in AI-driven autonomous driving and healthcare services, cloud services, and e-commerce.

Recently, Tencent has been strengthening its overseas expansion in its core businesses of gaming, music, and mobile messaging. It is also noteworthy that the US accounts for a significant proportion of Tencent's regional investments (Kim Sung-ok 2020). In September 2020, the US government banned transactions between Tencent and US companies, making WeChat, Tencent's flagship service, unusable in the US. This sanction has hindered Tencent's efforts to penetrate the global gaming and cloud markets over the past 2-3 years, aiming to overcome the limitations of a domestic company. If the sanctions extend to gaming, revenue will also be significantly impacted. However, it has been pointed out that the sanctions against Tencent have not only caused controversy in US federal courts but also have the potential to backfire on US companies such as Apple, Walmart, and Ford (Aurora 2020).

The US government also caused controversy by sanctioning the digital video service TikTok. This was a significant event, as digital video platforms are re-emerging as the primary gateway to the internet. YouTube is a digital video platform experiencing rapid user growth. While Facebook is a service that contentizes people's relationships and the news generated within those relationships, YouTube offers video content itself. ByteDance's TikTok was perceived as a threat to YouTube. TikTok's success in sharing short 15-second videos is evaluated as presenting a model where video creation is possible without professional video editing skills, unlike YouTube.

ByteDance is even considered to have replaced Baidu in forming a new BAT (Baidu, Alibaba, Tencent). While most Chinese internet platform companies have grown as local platforms based on domestic demand, TikTok has positioned itself from the outset as a technology-based global platform. While Chinese IT companies have focused solely on conquering China's vast domestic market, they have faced limitations in technological capability and scalability for expansion beyond China. Even super-large IT companies like Alibaba and Tencent have had a strong image of being domestic companies confined within China's borders. However, in recent years, companies like ByteDance have played a significant role in Chinese platform companies demonstrating outstanding capabilities on the global stage and emerging as global players (Yoon Jae-woong 2020, 259).

In this context, the US government issued an executive order in August 2020, citing national security concerns, to ban TikTok and divest all US assets related to it. ByteDance agreed to create 'TikTok Global' to manage its US operations, negotiating with Oracle and Walmart, but disagreements arose over various issues. The Chinese government retaliated by placing core TikTok technologies, such as its AI algorithms, on its export control list, leading to difficulties in the TikTok divestiture negotiations. While it has been suggested that US sanctions on Chinese platform companies could be further expanded by changing the target companies, the sanctions against ByteDance's TikTok have shown signs of some easing under the Biden administration.

2) Digital Content Platform Competition

Alongside competition in social media and digital video platforms, Over-The-Top (OTT) platform competition warrants attention. OTT refers to services that provide various media content, such as broadcast programs, movies, and educational content, over the internet. Netflix is a leader among OTT platform companies. Netflix's success is attributed to its core algorithm, Cinematch, which analyzes user content consumption patterns to recommend content tailored to individual device contexts. Netflix also pursues a strategy of 'original content' to strengthen its content competitiveness. Disney and Apple are closely pursuing Netflix (Kim Ik-hyun 2019; Go Myung-seok 2020).

The Chinese media market is also rapidly transforming around digital platforms. With the transition from traditional cable TV to video streaming, the influence of OTT platforms such as iQIYI, Tencent Video, and Youku Tudou has rapidly increased. The number of paid subscribers for iQIYI, which was only 11 million in 2015, surpassed 100 million in the second quarter of 2019. As the dominance in the Chinese media industry shifts towards OTT, the content purchase prices of video platform companies exceeded those of TV broadcasters starting in 2015, and by 2017, the scale of content investment by video platform companies surpassed that of TV broadcasters (Yoon Jae-woong 2020, 244).

Chinese platform companies, represented by BAT (Baidu, Alibaba, Tencent), are also entering the film industry. The film industry is an attractive channel for these companies to leverage their existing platforms. As box office revenue in China is primarily generated through online payments, a business model that secures video content and then generates revenue through streaming services and advertising is gaining attention. Alibaba and Tencent have expanded into the entire film industry, encompassing not only production, distribution, and talent management but also promotion and payment. Baidu, rather than focusing on film distribution and production, is targeting the online market through internet-exclusive content (Kim Sang-bae 2017, 113).

If users' 'time' is the most crucial factor in digital content consumption, then the biggest competitor to OTT is gaming. The gaming industry is roughly composed of mobile games for smartphones (45%), console games (32%), and PC games including online and packaged versions (23%) (Kim Chang-woo 2019). The console game sector is dominated by US and Japanese companies such as Microsoft, Sony, and Nintendo, while China is an emerging powerhouse in the mobile game sector. Given the significant growth potential of the gaming industry, platform companies in the US have been competitively entering the gaming sector recently.

Recently, Chinese game developers have shown remarkable growth. China's government policies protecting the game industry have also played a role. Chinese companies have gained time to accumulate experience in game operation and understand user preferences. Furthermore, with accumulated capital, Chinese game companies have acquired and merged with leading overseas companies, absorbing their game content, technological capabilities, and development talent to expand their scale. The mobile environment, fostered by the widespread adoption of smartphones, has also provided a new impetus for the Chinese gaming industry (Yang Jong-min 2020, 330).

Tencent is the leading game platform company in the Chinese and global gaming markets. Recently, Tencent has been building a gaming industry chain through investments worldwide. Tencent's aggressive moves have also triggered sanctions from the US government. In 2020, the Committee on Foreign Investment in the United States (CFIUS) sent letters to Riot Games and Epic Games, in which Tencent holds stakes, requesting data on their personal information processing policies for US users. This action, coupled with the executive order banning WeChat, led to interpretations that the US government had initiated sanctions against Tencent (Kim Yeon-ha 2020).

4. E-commerce and FinTech Platform Competition

1) E-commerce Platform Competition

The leading company in e-commerce is Amazon from the United States. Starting as an online bookstore, Amazon has diversified its business from apparel, food, and home appliances to digital content, cloud computing, financial services, and even offline stores. In particular, Amazon has focused on leveraging advanced technology in its logistics services to deliver faster and more efficiently, utilizing trucks, aircraft, and drones. Despite its success, Amazon failed to penetrate the Chinese market. In July 2017, Amazon withdrew from the Chinese market after 15 years of operation. In contrast, Alibaba holds approximately 62% of the Chinese e-commerce market. Unlike Amazon, whose primary model is direct sales where it purchases and sells goods itself, Alibaba, which primarily operates a marketplace model, uses artificial intelligence to analyze the daily demands of numerous users and provide personalized recommendations.

Alibaba is expanding its market dominance not only in e-commerce and artificial intelligence but also in various fields such as fintech, cloud computing, online healthcare, and autonomous driving operating systems. As a leader in e-commerce and mobile payments, Alibaba has established a business model that actively collects data to provide customized products and services to consumers. Furthermore, Alibaba's long-term vision is to build an ecosystem where users depend on the Alibaba platform by providing all necessary services for daily life in China, integrating advanced technological capabilities. This has been evaluated as a 'hyper-platform' that organizes all transaction-related functions within the Alibaba ecosystem online (Kim Sung-ok 2020).

Alibaba's model is underpinned by the vast Chinese market. After solidifying its competitiveness in the domestic Chinese market, Alibaba began expanding into overseas markets in 2016. Alibaba is extending its e-commerce success experience in China to Southeast Asia, which has a potential consumer base of 600 million people. In 2016, Alibaba acquired Lazada, which held a high market share in five Southeast Asian countries, including Indonesia. Subsequently, Alibaba made a significant investment in Tokopedia, an Indonesian e-commerce company. As a result, 'Alibaba-related companies now rank among the top four players in market share in six Southeast Asian countries with e-commerce market sizes exceeding $2 billion. Alibaba has effectively conquered the Southeast Asian e-commerce market' (Yoon Jae-woong 2020, 240).

The strengthening global influence of e-commerce leads to the establishment of an Alibaba ecosystem in Southeast Asia, as fintech and cloud affiliates also enter local markets. In particular, as the overseas expansion of e-commerce businesses connects with mobile payments, Ant Financial, Alibaba's fintech company, is expanding its investments in Southeast Asia. It is preempting the Southeast Asian fintech market by expanding investments in mobile payment platform companies in countries such as Singapore, Thailand, and Malaysia. Alibaba, which holds an overwhelming number one position in China's cloud market, is also rapidly increasing its presence in the global market. Alibaba's cloud services are used not only in mainland China but also in overseas markets such as Australia, Indonesia, India, and Japan.

It was in this context that U.S. Secretary of State Pompeo mentioned sanctions on Alibaba's cloud services in 2020. This is because Alibaba's expansion targets not only the U.S. market but also global markets, including Southeast Asia. This scenario paints a picture of future conflict between the Amazon and Alibaba spheres of influence. Amazon dominates North America, Europe, and Japan, and is betting its future on victory in Asia. Alibaba, in contrast, is consolidating its overwhelming position in Asia based on its dominance in China, and is now targeting Japan and Europe. The outcome of this competition could determine not only the future of Amazon and Alibaba but also the fate of the United States and China (Ninia 2020).

2) Digital Currency Platform Competition

The competition among e-commerce platforms is linked to mobile payment platforms. PayPal, founded in the U.S. in 2010, was considered a pioneer in the digital payment market and was expected to grow. However, China is the country that is fundamentally driving fintech innovation worldwide. Chinese companies have introduced new financial services closely related to daily life, fundamentally changing the landscape of the financial industry. As a result, over 90% of Chinese citizens use Alipay or WeChat Pay as their mobile payment method (Lee Wang-hwi 2018; Kim Chae-yoon 2020). In China, the big data accumulated through mobile payments is being used to provide customized services in various fields such as e-commerce, mobility, O2O, and media, becoming a 'game changer' that disrupts existing industrial structures (Yoon Jae-woong 2020, 66).

Alipay has expanded its mobile international payment system to Southeast Asia, where credit card penetration is slow. Starting with the acquisition of a 40% stake in India's Paytm in 2015, it established a cooperative network in 12 countries with 1.2 billion people by 2018, including Thailand's TrueMoney in 2016, South Korea's KakaoPay, Philippines' GCash, AlipayHK, Malaysia's Touch 'n Go, Indonesia's DANA in 2017, Pakistan's Easypaisa, and Bangladesh's bKash in 2018. It combined its vast financial resources with years of service experience accumulated in China, such as QR codes. Mobile payments are platforms that are quietly expanding their dominance within the Alibaba ecosystem in these countries. Users are becoming members of Alipay without even realizing it (Seo Bong-gyo 2020).

U.S. government scrutiny targeting Alipay is also intensifying. In January 2018, CFIUS blocked Ant Financial's acquisition of MoneyGram, a major U.S. remittance service provider. Furthermore, in 2020, there were even discussions of the U.S. government adding Ant Financial to a blacklist and imposing sanctions. The U.S. considering sanctions on China's largest fintech company is interpreted as stemming from concerns that it could threaten the dollar-centric financial system. Digital remittance systems like Alipay can be a threat because they bypass the traditional Society for Worldwide Interbank Financial Telecommunication (SWIFT). In this light, the U.S. sanctions on Ant Financial are rooted in the challenge posed by Chinese mobile payment platforms to the U.S.-led international credit card-based SWIFT system (Seo Bong-gyo 2019).

In June 2019, Facebook's announcement of Libra, a blockchain-based cryptocurrency, ignited competition in the digital currency platform space. However, the most significant threat to the U.S. in the digital currency sector currently is the digital yuan, or Digital Currency Electronic Payment (DCEP), demonstrated by China in April 2020. China's long-term goal is to challenge the existing international monetary order centered on the dollar. While it is difficult to shake the hegemony of the dollar with the traditional yuan, China aims to increase the yuan's influence in the international financial market through the indirect method of digital currency (Lee Sung-hyun 2020). The U.S. government has maintained a cautious stance on digital currency, but in 2020, it shifted its position towards issuing a 'digital dollar' led by the government, such as through the distribution of COVID-19 relief funds. This change was spurred by the digital yuan (Lee Kwang-pyo 2020).

These moves by China and the U.S. in the digital currency sector are raising concerns about the potential decoupling of the global financial system. For example, since 2018, Alibaba has been facilitating international remittances using blockchain, a distributed ledger technology, through Alipay, expanding its remittance destinations to countries like the Philippines and Pakistan. Alipay cannot be seen merely as a financial service of a single company. Rather, it could be the prelude to the fragmentation of the global financial order, which may occur over the next few decades. This is because there is a real risk that China may establish a separate financial system for debt repayment and trade settlement (Tanaka Michiaki 2019, 292).

IV. The Complex Geopolitics of Digital Platform Competition

1. The Non-Geopolitics of Global Supply Chain Conflicts

In May 2019, President Trump's executive order demanded that major IT companies cease business with Huawei. U.S. authorities placed Huawei on the Entity List, citing national security threats, and demanded that major private IT companies halt business with them. These measures had a qualitatively different impact than a ban on Huawei product imports. Given the heavy reliance on global supply chains, a disruption in component supply could halt equipment and software updates, potentially leading to Huawei's complete expulsion from the 5G mobile communication market as intended by the U.S. If this scenario were to materialize, it would signify a complete restructuring of the U.S. telecommunications equipment supply chain, indicating a significant ripple effect.

The most pressing issue in the U.S.-China tech competition related to recent global supply chain issues is semiconductors. While the U.S. holds an advantage with its foundational technology used in virtually all semiconductors worldwide, China is catching up. China's low self-sufficiency rate in semiconductors is also a problem. China accounts for about 45% of global semiconductor demand and its semiconductor import value exceeds that of crude oil. In response, 'Made in China 2025' set a goal of 70% self-sufficiency.

Recently, the U.S. has been using semiconductors as a key tool to pressure China. The Trump administration pressured TSMC and sanctioned SMIC to cut off the supply chain for Huawei, which was embroiled in controversy over 5G telecommunications equipment. The Biden administration is maintaining existing sanctions on China, while also pursuing reshoring to strengthen the resilience of the semiconductor supply chain, where domestic production accounts for only 44%, and formulating comprehensive plans to boost U.S. semiconductor technological innovation and production capacity. In response, China has countered by expanding support measures to enhance its semiconductor technological capabilities. A prime example is the announcement of a plan in March 2021, following the State Council's announcement of semiconductor industry promotion measures in August 2020.

In addition to semiconductors, other contested areas include batteries, electric vehicles, and eco-friendly materials. Unlike semiconductors, Chinese companies are leading in the battery sector. In particular, they have taken the lead in electric vehicle batteries, surpassing South Korea (36.2%) with a market share of 34.9% in 2020. Furthermore, China's electric vehicle market is rapidly growing; in 2021, 1.7 million units were projected to be sold in China compared to 500,000 in North America. In the field of eco-friendly materials, China accounts for about 80% of global rare earth production and approximately 45% of the market share for eco-friendly materials and substances.

These are areas where the U.S. has a high degree of dependence on China. Therefore, if U.S.-China tensions escalate, it could negatively impact the U.S. supply chain. The Biden administration is actively promoting domestic development and production of electric vehicles, batteries, and eco-friendly materials, pledging to create one million jobs in the green vehicle sector. Additionally, the U.S. is discussing the need to strengthen cooperation in green tech supply chains with countries like South Korea, Japan, and the EU.

The COVID-19 pandemic has brought the competition in biotechnology and pharmaceuticals to the forefront. The U.S.-China competition in this field has also been fierce, with the U.S. developing vaccines such as Pfizer, Moderna, Novavax, and Janssen, while China developed Sinovac, Sinopharm, and CanSino. However, the safety of Chinese vaccines and their development process, particularly the opacity of clinical trials, remain controversial. A competition in vaccine diplomacy is also unfolding between the U.S. and China.

The COVID-19 pandemic has also highlighted the vulnerability of the supply chain in the biotechnology and pharmaceutical industries. The U.S. relies on overseas production for medical equipment and pharmaceuticals. In particular, Chinese-made medical equipment and components account for a significant portion of U.S. imports; in 2018, 22% of ultrasound diagnostic devices were made in China. Delays in the supply of active pharmaceutical ingredients due to COVID-19 have led to the recognition of this as a national security threat, and ultimately, the Biden administration included the pharmaceutical industry in its '100-day supply chain review.' While the U.S. is making various efforts to reduce its dependence on China, the technological gap between the U.S. and China in the biotechnology and pharmaceutical sectors is gradually narrowing.

2. The Classic Geopolitics of Alliance and Diplomacy Platform Competition

Looking at the U.S.-China digital platform competition discussed above, it is evident that a form of 'platform competition for alliances and diplomacy' is simultaneously underway between nations or blocs. In August 2020, U.S. Secretary of State Pompeo announced the 'Clean Network' initiative to protect critical data and networks from China. The Clean Network program effectively imposes a comprehensive ban on all Chinese IT products, from mobile carriers, mobile apps, and cloud servers to undersea cables. It signifies the U.S. intention to drive Chinese companies out of the global IT business and telecommunications industry, ostensibly for the protection of American personal information.

In response, China countered with the 'Global Data Security Initiative.' In September 2020, Chinese Foreign Minister Wang Yi emphasized three principles: multilateralism, security and development, and fairness and justice. He argued that countries should create global rules that are participatory and respect each other's interests to counter threats to data security. This initiative advocated for global data security rules based on multilateralism and respect for national interests, achieved through the participation of all countries. Furthermore, he criticized certain countries' unilateral actions and attacks on leading companies under the guise of security as blatant tyranny, targeting the U.S.

In this process, the U.S. is attempting to isolate China through a 'logic of exclusion,' as implied by the term 'clean,' while China is trying to rally supporters through new international norms to escape the trap of U.S. unilateralism. Viewed more broadly, this can be understood as an extension of the U.S.'s Indo-Pacific strategy and China's Belt and Road Initiative. The outcome of the platform competition for alliances and diplomacy between the U.S. and China will depend on how many countries align with the agendas proposed by both nations.

The U.S. Department of State emphasized that all freedom-loving countries and companies are urged to join the Clean Network. China, emphasizing the opportunity to access its market of 900 million internet users, plans to attract middle-income and developing countries. As of early August 2020, the U.S. Department of State announced that over 30 countries had joined the Clean Network. Taiwan officially declared its participation in the Clean Network on August 31. In contrast, Foreign Minister Wang Yi merely mentioned discussing data security in multilateral platforms such as the UN, G20, BRICS, and ASEAN. Although Chinese diplomats contacted numerous foreign governments before the initiative's announcement, the extent of support received remains unclear.

While it might seem that the U.S. has an advantage at first glance, it is difficult to conclude this definitively, given that China has invested enormous funds in supplying 5G and cyber infrastructure to Asia, Latin America, and Africa. Leveraging its vast domestic market, China is creating its own platforms in e-commerce, fintech, SNS, and OTT, and then expanding companies that have honed their skills on these platforms into Southeast Asia, Africa, and the Middle East – regions where U.S. influence is relatively weaker – in an attempt to erect a 'digital Bamboo Curtain.' This would not only build China's resilience against U.S. pressure but also allow it to escape the U.S. encirclement strategy and establish its own sphere of influence.

The digital version of the Belt and Road Initiative, often referred to as the 'Digital Silk Road,' exemplifies this potential (Cha Jeong-mi 2020). China is pursuing the Digital Silk Road in three main areas. First, China aims to become a global leader in providing internet infrastructure, including next-generation mobile communication networks (5G), fiber optic cables, and data centers. Second, China is investing heavily in the development of advanced technologies that will become crucial economic strategic assets, such as satellite navigation systems, artificial intelligence, and quantum computing. Finally, based on the infrastructure built through the Digital Silk Road, China is forming a China-centric digital ecosystem by establishing e-commerce platforms and distributing digital currency.

3. The Critical Geopolitics of Norms and Values Platform Competition

Along this Digital Silk Road, China is pursuing diplomatic initiatives to propagate international norms favorable to its interests in the future digital world. In other words, through the Digital Silk Road, China aims to export its 'digital authoritarianism model' globally, thereby establishing a world order based on non-liberalism. Seen in this light, the platform competition between the U.S. and China is not merely a competition to gather allies in diplomacy, but, more fundamentally, a competition for platforms of norms and values. The liberal world order centered on U.S.-led norms and values, established in the latter half of the 20th century, and the digital platforms reflecting it, have been in operation (O’Mara 2019). Now, China's norms and values are posing a challenge. Indeed, China is accelerating the development of digital platforms that apply its own norms and values.

As Huawei's 5G technology spreads globally, Chinese standards will be established, and platforms compatible with those standards will connect to them. These platforms will operate based on authoritarian values. Almost all information about citizens connected to the national platform can be transferred to the state, and the state can use advanced technologies like artificial intelligence to monitor and control citizens with great precision. China's platform monopoly is a pathway to a massive, technologically advanced authoritarian state. Numerous developing countries and transitional economies seeking to maintain authoritarian regimes while developing their economies may adopt the Chinese model. China's path is to form an authoritarian value bloc, dividing the liberal international order into two blocs (Lee Geun 2019).

On the other side, there is another giant platform bloc centered around the United States. While the Trump administration's Clean Network initiative reflected this tendency, it is expected to become even more pronounced under the Biden administration. The emphasis will likely shift from technology to values, and from security to norms. The U.S. is expected to solidify its alliance front under the banner of human rights and democracy, aiming to restore its international role and leadership status and emphasizing multilateralism. It is highly probable that the U.S. will express cooperation with other countries to protect personal information and secure national infrastructure, and promote a 'Cyber Democracy Alliance' in response to 'high-tech authoritarianism.' President Biden's diplomatic actions since taking office, starting with climate change, demonstrate a return to international norms. The G7 summit held in Cornwall, UK, in June 2021 also showcased the future international order envisioned by the U.S. and the re-cohesion of the Western bloc.

In response to these U.S. offensives, China faces the challenge of overcoming the hurdles of universality, reliability, and human rights norms. In fact, during the COVID-19 pandemic, the U.S. and China competed over these aspects of universality and reliability. The COVID-19 crisis, in particular, highlighted the nature of the regime competition between the U.S. and China. Issues such as the judgment and decisiveness of political leadership, and the disclosure and transparency of information, became points of contention. Moreover, both the U.S. and China utilized these differences as ideological grounds for asserting their respective system's superiority over the other. The global leadership of both countries, based on their domestic system models, came under scrutiny. The situation, where existing international organizations lacked credibility and the creation of new international regimes was difficult, coupled with the absence of a country capable of leading the agenda for international cooperation, raised concerns about a governance vacuum.

Instead of pooling efforts to establish cooperative mechanisms at the global level, the U.S. and China responded with a bloc mentality, seeking to solidify their respective alliances. However, neither the U.S. nor China achieved the intended results in their pursuit of alliance diplomacy in response to COVID-19. The U.S. approach, emphasizing 'America First,' raised concerns about rifts within alliances. The situation was similar for China's diplomatic leadership. It was not easy for China to transform the 'China responsibility theory' for the origin of COVID-19 into a 'China contribution theory' for its resolution. The rigidity of the Chinese system, as well as its aggressively conducted diplomatic offensive, paradoxically caused the international community to distance itself from the Chinese model.

4. The De-Geopolitics of the Emergence of a Splintered Internet

The competition in platforms of alliances, diplomacy, norms, and values, as examined above, takes the form of a 'Platform of Platforms' competition. This means it encompasses multiple platforms rather than competition over a single platform. In other words, it can also be called a competition of 'comprehensive platforms' or 'meta-platforms.' In fact, the concept of 'global hegemony competition' in international politics is not significantly different from this 'Platform of Platforms' competition, as it involves building a complex power order that spans various domains. The outcome of this 'Platform of Platforms' competition can result in the victory of one side, which is referred to as 'power transition' in international politics. However, 'Platform of Platforms' competition can also lead to a division into two incompatible platforms.

The current 'Platform of Platforms' competition between the U.S. and China increasingly suggests the latter scenario. In other words, the recent trend has raised concerns that the internet, which connects the world, could be split in two as the U.S. and China engage in a digital hegemony competition. The changes in the world, represented by China's growth, the U.S.-China trade war, supply chain decoupling, deglobalization, and nationalism, as well as COVID-19, have made a 'split internet' a readily predictable outcome. Countries aligned with the U.S. would use one half of the internet, led by the U.S., while countries closer to China would use the other half, led by China. This perspective is gaining traction. Nations like South Korea, which have high security or economic dependencies on both the U.S. and China, may face a situation where they have to choose between these two fragmented internets.

In fact, China has long attempted to build its own internet world. Within China, services like YouTube, Google Search, Facebook, Instagram, and Netflix, as well as foreign news outlets, are blocked. China employs a powerful internet control system, comparable to the Great Firewall, to prevent information that opposes its regime from entering and to block Chinese citizens from accessing foreign internet platforms. As a result, Chinese citizens use Baidu, WeChat, and Weibo instead of Google, Facebook, and Twitter. Within this Great Firewall, China also controls its domestic tech companies to censor politically sensitive content.

There is even discussion among Western countries about the possibility of the internet splitting into a U.S. version and a European version, as opinions diverge on how to manage the internet. The former focuses on national security and crime prevention, while the latter is creating new rules emphasizing privacy and individual protection. If internets with different standards and accessibility emerge based on country and region, it will inevitably affect international information exchange, as well as international finance and trade. The global internet, once likened to an 'ocean of information' accessible to all, may transform into a series of fragmented lakes or ponds.

The progression of this situation is captured by the term 'Splinternet,' a portmanteau of 'Splinter' and 'Internet.' In 2018, former Google Chairman Eric Schmidt alluded to the possibility of such a Splinternet, predicting that the internet world might split into a U.S.-led internet and a China-led internet. This vision of division appears to be validated by the fragmentation and restructuring of semiconductor supply chains, data localization, the division of e-commerce and fintech systems, and differences in content censorship and surveillance regimes. While the internet to date has been a free and open World Wide Web (WWW) for 'all,' regardless of borders, religion, or ideology, the emerging Splinternet may become a Region Wide Web (RWW) built geographically by region.

V. Conclusion

This article has examined a facet of the evolving U.S.-China technological hegemony competition in the post-COVID-19 era through the lens of the rise of digital platform competition. Early examples of platform competition between U.S. and Chinese companies can be found in the attempts of Chinese Linux to counter the Wintel computing platform and Chinese companies' challenges to Google and Apple's smartphone OS and app store platforms. In the internet era, competition in internet search, represented by Google and Baidu, and competition in artificial intelligence, cloud, and data platforms became areas of interest. Recently, against the backdrop of a non-contact environment, competition between U.S. and Chinese companies has emerged around SNS and video platforms, and OTT and game platforms. In each phase, U.S. and Chinese companies such as Microsoft, Apple, Google, Facebook, Amazon, TikTok, Tencent, and Alibaba have been at the center of controversy. Future intense competition is anticipated in the e-commerce and fintech sectors.

What is noteworthy in this process is the remarkable progress of Chinese platform companies. In understanding the future of digital platform competition, the potential of Chinese companies as next-generation platforms has become a significant variable. In fact, most of the Chinese platform companies currently discussed emerged by imitating the business models of U.S. companies. E-commerce giant Alibaba followed Amazon's model, search engine company Baidu followed Google's, video streaming company Youku followed YouTube's, and SNS company Tencent closely copied Facebook's model. As latecomers with lagging technological capabilities, they were able to generate substantial profits simply by applying advanced business models to their vast domestic market. However, China's story is dramatic in that it has moved beyond mere imitation to innovation and reversal.

Indeed, in some sectors recently, U.S. companies have begun to reference Chinese business models. For example, Facebook is considering a shift from an open SNS platform model to Tencent's messenger-based platform model. ByteDance, the parent company of TikTok, is evaluated as having pioneered new business models from the outset by predicting consumer service demands based on its advanced technological capabilities. In the fintech sector, China's mobile payment systems, Alipay and WeChat Pay, pioneered this field ahead of U.S. companies. The progress of the digital yuan is also one step ahead, challenging the dominance of the U.S.-led international monetary order. Second-generation platform companies that have recently emerged in China, such as Meituan Dianping, are developing their own models independently, rather than imitating U.S. companies.

This article has emphasized that this digital platform competition is not merely a competition between companies. International political sanctions in areas such as search engines, artificial intelligence, data localization, e-commerce, and fintech have acted as variables in digital platform competition. Not only were the governments of the U.S. and China major actors, but the logic of sanctions they employed was based on geopolitical considerations rather than purely economic ones. The international political economy of this digital platform competition has recently expanded into the fields of diplomacy and security, with platform competition for cyber alliances and diplomacy also taking place. As evident in the U.S. Indo-Pacific strategy and China's Belt and Road Initiative, platform competition surrounding digital norms and values is also ongoing. The U.S.-China tech hegemony competition is evolving into a complex landscape that can be viewed from the perspective of complex geopolitics as a 'Platform of Platforms' competition, rather than competition in a single platform sector.

If the current digital platform competition between the U.S. and China intensifies further, it may ultimately result in the internet being split in two. As China's growth and U.S.-China tensions trigger the dismantling of globalization, and COVID-19 accelerates deglobalization, even the internet is at risk of fragmentation. Countries that follow the U.S. and China may find themselves living within their respective divided internet camps. Just as high barriers were erected between the East and West blocs during the U.S.-Soviet Cold War in the mid-to-late 20th century, two blocs with differing interests, systems, and ideologies may emerge in the internet world. In such a scenario, countries like South Korea, caught in the middle of the competition between the U.S. and China, may face the situation of having to choose between these two internet worlds.

What should be South Korea's digital platform strategy amidst the U.S.-China digital platform competition? Until recently, the Trump administration urged key allies and partners, including South Korea, to participate in the 'Clean Network.' This pressure is likely to continue under the Biden administration. China has also reportedly exerted indirect pressure on South Korea to join its Global Data Security Initiative, citing many common points with South Korea's 'Korean New Deal.' South Korea adheres to the systems, norms, and values of the Western bloc, yet shares many policy and cultural similarities with China, particularly in the economic sphere. It appears as though South Korea is straddling both platforms. While this situation presents an opportunity when U.S.-China relations are stable, it becomes a dilemma in times of escalating conflict like the present.

Considering this context, approaching the issue by 'leaving it to the judgment of individual private companies,' as the government did in the 2019 Huawei incident by deferring its opinion, is likely to lead to a more difficult second choice in the future. When the gap between platforms was small, a strategy of playing both sides might have worked, but in a situation where the gap between platforms is expected to widen further, the approach must be different. This is especially true because the nature of digital platform competition among companies is not only unfolding more broadly and complexly but has also evolved into a geopolitical issue. It is time to urgently consider more concrete roles that should be actively played as a middle power, before external pressure forces a choice.■

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Ministry of Industry and Information Technology of the People's Republic of China. 2017. “Interpretation of the Three-Year Action Plan for Cloud Computing Development (2017-19).” https://www.miit.gov.cn/zwgk/zcjd/art/2020/art_78b03dae6f744842a1b7805bb6adc774.html (Accessed: February 7, 2021).

[1] For existing domestic and international research on US-China competition from the perspective of ‘platform competition’ or ‘platform power’ presented in this article, refer to Simon (2011), Cho (2011), Kim (2017), Parker et al. (2017), Galloway (2017), Tanaka (2019), Yoon (2020), Go (2020), Kim (ed.) (2020; 2021), and Yoo (2021).

■ Author: Kim, Sang-bae_ Professor, Department of Political Science and International Relations, Seoul National University. He graduated from the Department of Diplomacy at Seoul National University and obtained a Ph.D. in Political Science from Indiana University. His main research areas include information, communication, and networks in international relations. His major works include 《Virtual Spear and Net Shield: World Politics of Cybersecurity》 (2018), 《Arachne’s International Relations: Challenges of Networked World Politics Theory》 (2014), 《Information Revolution and Power Transition: A Perspective of Network Political Science》 (2010), and 《Standard Competition in the Information Age: Wintelism and Japan’s Computer Industry》 (2007).

■ Responsible and Edited by: Yoon Ha-eun_EAI Research Fellow

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