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The company is facing pressure after a vote in the US House of Representatives.
Chinese authorities have criticized Washington for pressuring short video sharing app TikTok. According to The Wall Street Journal, the Chinese government has made it clear to TikTok's owner, Beijing – based ByteDance, that it would rather ban the app in the United States than sell its American business.
This position of Beijing puts ByteDance in a difficult position. TikTok, which has 170 million users in the United States – its largest market-faces a major threat to its existence in America. Last week, the US House of Representatives overwhelmingly approved a bill obliging ByteDance to sell TikTok or face a ban in the country for national security reasons.
Although TikTok assures that it will not share the data of American users with Beijing, even if the Chinese authorities demand it, concerns remain in Washington. The bill has yet to be approved by the Senate, where they are more cautious. But President Biden has already said that he will sign the document if it reaches his desk.
The Chinese Commerce Ministry's comment that the US "should stop its unjustified crackdown" on TikTok was seen by some ByteDance executives as a signal to Beijing of potential regulatory hurdles to selling the app. China has previously warned that divesting TikTok would require government approval as an export of the technology.
According to informed sources of the publication, the founder of ByteDance Zhang Yiming, who owns a large stake, is not yet negotiating the sale of TikTok to potential buyers. Former US Treasury Secretary Steven Mnuchin has announced that he is forming a consortium to buy TikTok. The price tag is expected to exceed $100 billion, although TikTok's revenue was about $20 billion last year.
The fate of TikTok is once again at the epicenter of geopolitical disagreements between the US and China. After the Trump administration failed to ban the app in 2020, the company unsuccessfully tried to reach a compromise with US regulators as part of a project to separate user data from the US.
TikTok's global popularity is seen in China as a rare success for a country that has long remained a "global factory" but has not created its own global technology brands. According to experts, the Chinese authorities will firmly defend TikTok as a "valuable asset".
The app's call for American users to protest the business sale bill drew criticism in the United States, but was received positively in the Chinese media and online community. If TikTok is eventually banned in America, analysts fear, it will pave the way for similar actions against other Chinese companies. In March, Biden instructed to study foreign software in cars, pointing out the potential risk from Chinese technologies.
According to the former editor-in-chief of the pro-Chinese newspaper Global Times, if ByteDance takes an adamant position and is ready to close TikTok, instead of relinquishing control over it, then American lawmakers and the administration will face the political risk of banning the application. Beijing will be able to influence any potential deal to sell TikTok, since in 2020 China included content recommendation algorithms, a key technology that has ensured the app's success, in the export control list.
Analysts believe that China's top leadership is likely to prioritize national interests over ByteDance's financial interests. However, TikTok's efforts to attract business partners and users in the United States may make it difficult to impose a ban on the app. TikTok recently launched its own commercial service, and the company's CEO's personal account has 3.8 million subscribers.
Chinese authorities have criticized Washington for pressuring short video sharing app TikTok. According to The Wall Street Journal, the Chinese government has made it clear to TikTok's owner, Beijing – based ByteDance, that it would rather ban the app in the United States than sell its American business.
This position of Beijing puts ByteDance in a difficult position. TikTok, which has 170 million users in the United States – its largest market-faces a major threat to its existence in America. Last week, the US House of Representatives overwhelmingly approved a bill obliging ByteDance to sell TikTok or face a ban in the country for national security reasons.
Although TikTok assures that it will not share the data of American users with Beijing, even if the Chinese authorities demand it, concerns remain in Washington. The bill has yet to be approved by the Senate, where they are more cautious. But President Biden has already said that he will sign the document if it reaches his desk.
The Chinese Commerce Ministry's comment that the US "should stop its unjustified crackdown" on TikTok was seen by some ByteDance executives as a signal to Beijing of potential regulatory hurdles to selling the app. China has previously warned that divesting TikTok would require government approval as an export of the technology.
According to informed sources of the publication, the founder of ByteDance Zhang Yiming, who owns a large stake, is not yet negotiating the sale of TikTok to potential buyers. Former US Treasury Secretary Steven Mnuchin has announced that he is forming a consortium to buy TikTok. The price tag is expected to exceed $100 billion, although TikTok's revenue was about $20 billion last year.
The fate of TikTok is once again at the epicenter of geopolitical disagreements between the US and China. After the Trump administration failed to ban the app in 2020, the company unsuccessfully tried to reach a compromise with US regulators as part of a project to separate user data from the US.
TikTok's global popularity is seen in China as a rare success for a country that has long remained a "global factory" but has not created its own global technology brands. According to experts, the Chinese authorities will firmly defend TikTok as a "valuable asset".
The app's call for American users to protest the business sale bill drew criticism in the United States, but was received positively in the Chinese media and online community. If TikTok is eventually banned in America, analysts fear, it will pave the way for similar actions against other Chinese companies. In March, Biden instructed to study foreign software in cars, pointing out the potential risk from Chinese technologies.
According to the former editor-in-chief of the pro-Chinese newspaper Global Times, if ByteDance takes an adamant position and is ready to close TikTok, instead of relinquishing control over it, then American lawmakers and the administration will face the political risk of banning the application. Beijing will be able to influence any potential deal to sell TikTok, since in 2020 China included content recommendation algorithms, a key technology that has ensured the app's success, in the export control list.
Analysts believe that China's top leadership is likely to prioritize national interests over ByteDance's financial interests. However, TikTok's efforts to attract business partners and users in the United States may make it difficult to impose a ban on the app. TikTok recently launched its own commercial service, and the company's CEO's personal account has 3.8 million subscribers.
