China Says It Opposes Forced Sale of TikTok
SINGAPORE—China said it would strongly oppose any forced sale of TikTok, responding for the first time to a Biden administration demand that the short-video app divest itself from its Beijing-based parent ByteDance Ltd. or face a nationwide ban.
The comments came hours before TikTok Chief Executive Shou Zi Chew testifies Thursday at a congressional hearing over national-security concerns about user data. They put TikTok in the middle of rising geopolitical tensions between the U.S. and China that have largely centered around technology.
China’s Commerce Ministry said Thursday that a sale or divestiture of TikTok will involve exporting technology and has to be approved by the Chinese government.
The reported efforts by the Biden administration would severely undermine global investors’ confidence in the U.S., said Shu Jueting, a ministry spokeswoman.
“If the news is true, China will firmly oppose it,” she said, referring to the forced sale.
The Biden administration has demanded that TikTok’s Chinese owners sell their stakes, citing national-security concerns that Beijing could access U.S. users’ data and influence the content that Americans consume.
Mr. Chew will be grilled Thursday over safety and security concerns about the Chinese-controlled platform that is hugely popular in the U.S. He has said divesting the company from its Chinese owners doesn’t offer any more protection than a multibillion-dollar plan TikTok has already proposed to ringfence U.S. user data.
ByteDance and TikTok didn’t immediately respond to requests for comment after the ministry issued its stance. The companies have said they wouldn’t share data with the Chinese government even if requested.
Beijing has increasingly signaled its desire to protect Chinese technology. It recently proposed to amend a regulation restricting the export of Chinese-created content-recommendation algorithms, a secret sauce of TikTok’s global success, which lawyers say is a reminder that Beijing has a hand to play in any deal.
TikTok has more than 150 million users in the U.S., its most lucrative market.
In 2020, when the Trump administration was pushing for a sale of TikTok’s U.S. operations, China added algorithms to an export-control list. Any deals that involve transferring such technologies developed in China to a third party outside the country now require government approval.
ByteDance said at the time that it had applied for government approval for the preliminary agreement it reached with
Oracle Corp.
and
Walmart Inc.
to set up a new U.S. entity, TikTok Global. The idea eventually fell by the wayside and China’s official records show ByteDance has never received an approval for tech export.
TikTok’s recommendation algorithm was initially developed from algorithms and artificial-intelligence models created by its parent, people familiar with the company have said, though the app’s systems run on servers in Singapore and the U.S.
TikTok also shares a common algorithm architecture with ByteDance’s China-focused video-sharing app Douyin, they said.
In recent exchanges with Beijing officials, ByteDance executives have understood that Beijing is very likely to block a sale or divestiture of TikTok’s U.S. operations, even though the officials didn’t explicitly say that, people familiar with the matter said Thursday. The authorities have encouraged ByteDance to firmly defend its interests, they said.
—Grace Zhu contributed to this article.
Write to Raffaele Huang at [email protected]
Corrections & Amplifications
Shu Jueting is a spokeswoman for China’s Commerce Ministry. An earlier version of this article incorrectly spelled her name as Shu Yuting. (Corrected on March 23)
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
SINGAPORE—China said it would strongly oppose any forced sale of TikTok, responding for the first time to a Biden administration demand that the short-video app divest itself from its Beijing-based parent ByteDance Ltd. or face a nationwide ban.
The comments came hours before TikTok Chief Executive Shou Zi Chew testifies Thursday at a congressional hearing over national-security concerns about user data. They put TikTok in the middle of rising geopolitical tensions between the U.S. and China that have largely centered around technology.
China’s Commerce Ministry said Thursday that a sale or divestiture of TikTok will involve exporting technology and has to be approved by the Chinese government.
The reported efforts by the Biden administration would severely undermine global investors’ confidence in the U.S., said Shu Jueting, a ministry spokeswoman.
“If the news is true, China will firmly oppose it,” she said, referring to the forced sale.
The Biden administration has demanded that TikTok’s Chinese owners sell their stakes, citing national-security concerns that Beijing could access U.S. users’ data and influence the content that Americans consume.
Mr. Chew will be grilled Thursday over safety and security concerns about the Chinese-controlled platform that is hugely popular in the U.S. He has said divesting the company from its Chinese owners doesn’t offer any more protection than a multibillion-dollar plan TikTok has already proposed to ringfence U.S. user data.
ByteDance and TikTok didn’t immediately respond to requests for comment after the ministry issued its stance. The companies have said they wouldn’t share data with the Chinese government even if requested.
Beijing has increasingly signaled its desire to protect Chinese technology. It recently proposed to amend a regulation restricting the export of Chinese-created content-recommendation algorithms, a secret sauce of TikTok’s global success, which lawyers say is a reminder that Beijing has a hand to play in any deal.
TikTok has more than 150 million users in the U.S., its most lucrative market.
In 2020, when the Trump administration was pushing for a sale of TikTok’s U.S. operations, China added algorithms to an export-control list. Any deals that involve transferring such technologies developed in China to a third party outside the country now require government approval.
ByteDance said at the time that it had applied for government approval for the preliminary agreement it reached with
Oracle Corp.
and
Walmart Inc.
to set up a new U.S. entity, TikTok Global. The idea eventually fell by the wayside and China’s official records show ByteDance has never received an approval for tech export.
TikTok’s recommendation algorithm was initially developed from algorithms and artificial-intelligence models created by its parent, people familiar with the company have said, though the app’s systems run on servers in Singapore and the U.S.
TikTok also shares a common algorithm architecture with ByteDance’s China-focused video-sharing app Douyin, they said.
In recent exchanges with Beijing officials, ByteDance executives have understood that Beijing is very likely to block a sale or divestiture of TikTok’s U.S. operations, even though the officials didn’t explicitly say that, people familiar with the matter said Thursday. The authorities have encouraged ByteDance to firmly defend its interests, they said.
—Grace Zhu contributed to this article.
Write to Raffaele Huang at [email protected]
Corrections & Amplifications
Shu Jueting is a spokeswoman for China’s Commerce Ministry. An earlier version of this article incorrectly spelled her name as Shu Yuting. (Corrected on March 23)
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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