As US-China tensions increasingly reshape global business, an old dynamic is re-emerging with the return of the middleman. Multinational firms that once prized direct control are again turning to local partners to navigate political rifts and commercial barriers. The pattern echoes an older era: the same reliance on middlemen that once moved tea and porcelain through old Canton now underpins how TikTok, McDonald’s and Starbucks navigate a divided global economy.
Under the Canton system, overseas traders were confined to narrow “factories” outside the walled city of Canton, barred from negotiating directly with Chinese officials or markets. Instead, merchants relied on the Cohong, an officially appointed guild of 13 Hongs or merchant houses, to reach the empire’s coveted exports of tea, porcelain and silk. These intermediaries handled permits, finance and delivery.
The opium wars fundamentally transformed Sino-Western trade by opening multiple treaty ports, distributing commerce across China’s coast rather than funnelling it solely through Canton. Hong Kong emerged as a premier entrepôt alongside Shanghai’s rapid rise, creating a diversified network that eclipsed the old Canton monopoly.
Even despite this direct market access, however, some Western firms still depended on Chinese agents to bridge global commerce with local networks.
In the digital age, this approach has become more prominent for different reasons. TikTok’s success has turned into a liability. The controversy erupted in 2020 with the Trump administration’s executive order to ban the app over its Chinese ownership and presumed national security risks, sparking years of political back-and-forth over security and data privacy that persists today.
In the end, TikTok’s parent company ByteDance sought survival through structural insulation. It agreed to form a US-controlled joint venture led by Oracle, Silver Lake and other investors, structuring TikTok’s US operations behind a locally governed firewall while preserving ByteDance’s algorithmic core in China.
Media365
