Some people here are wondering about the implications of this. What this means IMO is that all Chinese investments in SV need to be liquidated at fire sale prices in the next 45 days. Regardless of how people here feel about China this is a huge escalation. The US is inflicting huge losses on Chinese companies for no clear violation of US laws on their part. The pandoras box is now open. Do countries get to do this t…
The laws in America not outright making it illegal for tyrannical organizations who operate concentrate camps and partake in genocide (Uighurs) to have access to our democratic societies and benefit economically doesn't mean it's not something you should stand for - and where the laws likely should exist for that.
Likewise, the CCP would likely just takeover Tesla's operations - maybe paying them, maybe not. The difference in the US, currently at least, is TikTok has options: 1) they don't sell and the ban comes, they don't receive any $x billions compensation, or 2) they understand a ban is likely in the US (and growing other democratic nations) and they make the smarter economic decision of selling for $x billions - maybe at fire sale pricing, however there are many competitors who could still compete and be capable of taking over operations, so perhaps not as low as otherwise it could be.
We're not hurtling towards the abyss, that's fear mongering; you may be right that SV startups may have to divest their China based investors, however that may or may not hurt them - and that would be the result of countering external costs to supporting and allowing CCP that we haven't been adequately accounting for for decades.
This is a strategic political-economic pressure decision to put pressure onto the CCP - notice that we're paying attention and won't stand for the level of abuse and tyrannical behaviours of the that we're becoming more and more aware of.
Economic pressure and preventing access to democratic societies for economic gain IS the graceful way to go about this, rather than allow CCP to gain more reach, access for propaganda for intelligence gathering and manipulation, to then spoil politicians further and become more entrenched in our societies economically and via investments in the most popular apps, etc.
And finally, the CCP isn't suicidal - their $500 billion stimulus you reference was for their own survival as well; they also wouldn't want this system they've been creating getting its fingers strongly into the rest of the world economy (which they depend on to maintain) to collapse, the collapse of which would mean things would shift greatly and more likely away from their own benefit.