Chinese State Media Signal Beijing's Disdain for 'Dirty and Unfair' TikTok Deal
September 23 2020 - 12:57PM
Dow Jones News
By Eva Xiao
HONG KONG -- Chinese state media took turns denouncing a White
House-approved plan to turn TikTok into a U.S.-based company,
casting more doubt over the fate of the Chinese-owned short-video
app that needs nods from both Beijing and Washington to avoid a ban
in the U.S.
Over the weekend, TikTok appeared to narrowly avoid having to
shut down operations in the U.S., where it has roughly 100 million
users, when President Trump said he had given his blessing to a
deal that would see the app join with Oracle Corp. and Walmart Inc.
to address the White House's national security concerns.
Several Chinese state-run newspapers slammed TikTok's proposed
deal in the U.S. as unfair and contrary to Chinese interests, a
signal Beijing could reject the deal after months of
negotiations.
"China has no reason to give the green light to such a deal,
which is dirty and unfair and based on bullying and extortion,"
wrote the China Daily, the Chinese government's English-language
mouthpiece newspaper, in an editorial on Wednesday. Doing so would
set a bad precedent, it argued. "If the U.S. gets its way, it will
continue to do the same with other foreign companies," it said.
The overseas edition of the Communist Party's flagship newspaper
People's Daily and the Global Times, a tabloid published by the
People's Daily, ran similar editorials this week.
TikTok, which is owned by Beijing-based ByteDance Ltd., has
taken center stage in U.S.-China friction over technology, with
both countries sparring over the app's future. In July, the Trump
administration said it might ban the app for Americans because of
concerns its data could be accessed by Beijing, something TikTok
has said wouldn't happen.
At the end of August, Beijing hit back with new
technology-export rules, indicating that ByteDance would need to
seek approval if it sold TikTok's video recommendation algorithm --
the secret sauce behind the app's notoriously addictive video feeds
-- to a U.S. buyer. Under the preliminary agreement, the algorithm
wouldn't change hands as part of the deal.
While TikTok's deal with Oracle and Walmart, which would form a
new entity called TikTok Global, earned Mr. Trump's signoff over
the weekend, the deal remains in flux, with participants publicly
disagreeing over its terms.
A spokesman for ByteDance Ltd. said Sunday it would retain an
80% stake outright, while Oracle said on Monday morning the 80%
would be distributed proportionally to ByteDance's current
shareholders, which include U.S. investors, and that ByteDance
would have no ownership in TikTok Global.
In an editorial titled "Say 'No!' to U.S. Robbery of TikTok,"
the Global Times expressed a view of the tussle over American
versus Chinese ownership in TikTok Global, which would provide
services to TikTok's current users in the U.S. and most of the
world outside China.
Warning that U.S. majority ownership of TikTok Global under the
terms described by Oracle on Monday would allow the U.S. to take
control of TikTok's global business and potentially cut off Chinese
access to it, the tabloid said the deal exposed "Washington's
bullying style and hooligan logic."
Allowing such a deal could also have longer term effects, argued
the People's Daily in a Wednesday editorial, which said ByteDance's
loss of corporate control over TikTok would "cause serious damage
to China's national security, dignity, and the long-term
development of related enterprises."
--Xiao Xiao and Liyan Qi contributed to this article.
Write to Eva Xiao at eva.xiao@wsj.com
(END) Dow Jones Newswires
September 23, 2020 12:42 ET (16:42 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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