Here’s What China Says About TikTok Being Sold To Microsoft, Potential Ban

TOPLINE

China’s state-run media outlets, which are often viewed as a gauge of sentiment among senior officials, widely condemned the United States this week over the potential sale of operations for social media app TikTok to tech giant Microsoft in a number of English-language countries, calling it “theft” and “open robbery” of Chinese technology.

KEY FACTS

In an op-ed published Monday, state-run Chinese tabloid the Global Times, accused the United States of “killing China’s most competitive companies” by threatening to ban TikTok, which is owned by Chinese company ByteDance, out of “cowardice” because it sees it as a threat to other American technology companies.

Hu Xijin, the editor-in-chief of the Global Times, further criticized the potential sale as an “open robbery,” adding that “President Trump is turning the once great America into a rogue country.”

Another state-backed publication, China Daily, criticized Trump’s comments as being “tantamount to inviting potential U.S. purchasers to participate in an officially sanctioned ‘steal’ of Chinese technology.”

The newspaper branded the move as a planned “smash and grab,” while also suggesting that China could retaliate and will by “no means accept the ‘theft’ of a Chinese technology company” lying down.

“In terms of response, we might see the [Chinese] government direct this public ire against U.S. companies operating in China via boycotts or other measures,” says Evan Rees, Asia Pacific Analyst with Stratfor, a RANE company.

Crucial quote

The potential sale of TikTok while under threat of a ban from the White House would no doubt “deepen the trend of increasing polarization between the U.S. and Chinese tech sectors, continuing the national security push by Western governments to counter Chinese influence and checking China’s global tech aspirations,” says Rees. “This is just the latest salvo in the U.S. pressure on Chinese tech, which is a bipartisan issue that will linger even after the Trump administration.”

Key background

TikTok has been in Washington’s crosshairs for quite some time now, with many top officials accusing the Chinese-owned app of collecting data on Americans for the Chinese government. After initially threatening to ban the social media app, President Trump said in his latest comments that he would give Microsoft the go-ahead to pursue a deal if a “very substantial” portion of the proceeds go to the U.S. Treasury. He also mentioned that a deal would be easier if Microsoft were to purchase the Chinese-owned app in its entirety, a day after the company confirmed that it was looking at buying TikTok’s operations in the U.S., Canada, Australia and New Zealand. Disputes over technology and intellectual property have been at the heart of deteriorating U.S.-China tensions, as evidenced by America’s past efforts to block Chinese tech company Huawei.

Big number: $50 billion.

That’s how much some investors of privately-owned parent company ByteDance have valued TikTok at, according to an exclusive from Reuters last week.

What to watch for

Rising U.S.-China tensions that some experts have called a “new Cold War.” Tensions between the world’s two largest economies have continued to deteriorate in recent months, with disputes over a range of matters including Hong Kong, Huawei, Taiwan, the South China Sea and several human rights issues. “Alongside the other fronts of U.S.-China tensions, the growing tech confrontation further troubles the viability of the phase one trade deal,” says Rees. He adds that beyond deepening the trend of increased polarization between the U.S. and China, the TikTok saga will also “further embolden the Chinese government’s techno-nationalist push with expanded state support for its tech sector.”

Further reading

The Trade Deal May Be Dead, Trump Says China Relationship ‘Severely Damaged’ (Forbes)

China Warns U.S. ‘Meddling’ In Hong Kong Could Derail Phase One Trade Deal (Forbes)

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