Tensions between US and China seems to have no end to it. It all started when the previous president of the United States, Donald Trump, announced trade war with China. Then, Huawei was banned from US, and is no longer cooperating with Google. Meaning, if you buy a Huawei phone, you need to use their maps and similar applications, that other Android phones offer. After that, the tension began in social media relation – more specific, US wants to ban TikTok, or at least they told the company that they need to change the ownership, as current one poses a threat to national security. And if that is not enough, Google now suspended China’s Pinduoduo app based on security concerns.

Ban of Huawei

New communications equipment from five Chinese companies, including Huawei and ZTE, will no longer be sold or imported in the US due to concerns over national security. The banned companies also include Hikvision, Dahua, and Hytera, which manufacture video surveillance equipment and two-way radio systems. This marks the first time US regulators have taken such action on security grounds. Hikvision has denied that their products pose any threat to US security and believes the decision will only harm small businesses, local authorities, school districts, and individual consumers. The US Federal Communications Commission (FCC) stated that its members voted unanimously on Friday to implement the new regulations. Previously, Huawei and other companies had denied supplying data to the Chinese government.

Ban of TikTok

Since the Trump administration threatened to ban TikTok in the US if its Chinese owners did not divest, the Biden administration is now taking similar action. TikTok has confirmed that US officials are demanding that the app's Chinese owners sell their stake in the social media platform, or risk facing a ban in the US. The Committee on Foreign Investment in the United States (CFIUS), a multiagency group, issued the new directive after years of negotiations with TikTok. The ultimatum represents a heightened level of pressure from Washington as more lawmakers once again raise national security concerns about the app. Some officials have expressed fears that the app could be exploited by the Chinese government to spy on US users or spread propaganda to a US audience. Additionally, there are concerns about the potential for social media platforms to lead younger users down harmful paths, although these concerns are not unique to TikTok. The app's future in the US appears uncertain, despite its broad reach and impact on American culture. However, all of this fuss could have a positive impact on Meta, more precisely on their Instagram reels, as they would get rid of one of the biggest competitor.

Financials

In 2022, Meta Platforms generated 116,61 billion USD revenue, as per Google Finance. Net income was 23,20 billion. Despite being high numbers, revenue was 1,12% lower than in 2021, while net income was lower for 41,07% compared to 2021. There was also a correction on the stock price, however, that gives it much space for movement and possible growth.* The fall is believed to be caused by multiple investments into Metaverse, which for now did not give back any reasonable profit.

Movement of Meta in the last five years. (Source: Investing) *

Adam Austera, chief analyst Ozios 

* Past performance is no guarantee of future results.