Asia Tea Time - #87 ☕

Author

Tim Phillips
January 19, 2025 • Estimated Reading Time: 6 minutes

Asia Tea Time - #87 ☕

This week I talk TikTok’s US ban and what we should be looking to do with year-end bonuses.

Macro in Asia

US and China tensions are set to ratchet higher after the US Supreme Court announced that it would uphold a ban on TikTok in the US.

That means the viral social media app – owned by China’s ByteDance – is set to be banned in the US on Sunday (19 January) unless government action is taken.

Why it’s happening

  • It’s all about “data security” according to the US government. They’re worried that China’s ByteDance and, indirectly, TikTok could be used as a backdoor by the Chinese government to spy on the 170 million Americans who have the app.

  • This TikTok ban has been in the works for a while as a “divest-or-ban law” was taken up the US House in April of 2024.

  • TikTok appealed the initial findings and took its case all the way to the Supreme Court but the top court in the US has upheld the ruling that the app is a threat to national security.

Why it matters

  • Well, Trump is taking power on 20 January and he’s been chatting quite a bit about potentially not banning it. In fact, early on Saturday, Trump said he would “most likely” give TikTok a 90-day reprieve from the ban after he takes office.

  • According to TikTok, over seven million small businesses in the US used the platform in 2023. Beyond that, many individuals in the US rely on the social media app to make a living.

What’s next?

  • It all comes down to what President Trump decides when he’s inaugurated as President for a second time on Monday. Either way, it looks like TikTok won’t remain in the US in its current form/ownership.

 

Tim’s Take

It goes from bad to worse it seems when it comes to US-China relations. After classifying Tencent as a military company in the first full week of 2025, the US Supreme Court has upheld the TikTok ban and it looks nearly certain the app won’t survive in the US.

Ironically, many Americans using TikTok have created accounts on viral Chinese app XioaHongShu (or “Little Red Book”) and hit the top of the download charts for App stores in the US. As of last Monday (13 January), the app had amassed 3.4 million daily active users – up from just 700,000 the day prior.

Many Americans are now losing it over how “advanced” China seems compared to America and it appears as though many Americans and Chinese citizens are communicating and opening up about their countries over the app itself.

From the business perspective, it looks as though earlier speculation of a TikTok sale to Elon Musk was misplaced as the company ruled it out. However, it seems that TikTok many only survive in the US if it’s sold by ByteDance to an American company.

TikTok did confirm late on Friday (in the US) that it would have to “go dark” on Sunday in the US if no action was taken. Previously, it was thought Americans who had the app installed already could still use it (before it eventually became obsolete due to lack of update) but the company latest news release suggests it will become unavailable to all users immediately.

While the alleged reprieve from the ban by Trump could buy TikTok some time, it looks like it will have to be sold off or divested – meaning it’s unlikely to survive in the US under 100% ByteDance ownership.

Tim’s Money Tip of the Week

With year-end bonuses for many workers coming up, it could be time to reflect on what one should actually do with a year-end bonus.

Besides the obvious, like paying off any high-interest debt you might have, there are multiple things we could put the money towards, like building up that emergency fund (of 6-12 months’ worth of expenses) we’ve been meaning to get going.

Additionally, in Singapore you could also top up retirement accounts like voluntary top-ups of the CPF or contributing to the Supplementary Retirement Scheme (SRS) – either up to the S$15,300 annual limit for Singapore Citizens and PRs or the S$35,700 annual limit for Foreigners.

Getting it done early in the year also means you have more time for your funds to compound over time.

Finally, while there is some advice for you to contribute a whopping 50% of your bonus towards savings and investment, we should take that with a pinch of salt. We also need to figure out if we have any outlays in the next two to three years that require some moolah (i.e. cash).

That could include a deposit on a home, a planned wedding or even the upcoming year’s tax payments (if we haven’t already saved for it).

Plus, we will probably want to also enjoy our bonus by spending some of it – either on a short holiday or something we’ve been eyeing for a while. After all, we should enjoy ourselves a little after a hard year of work.