preferred option
Chinese authorities have stated they will not permit a forced sale of the social network TikTok in the United States because of the bill prohibiting it in the country. The Wall Street Journal reported that sources within the publication described the stance as coming from senior officials and highlighted that the owners of TikTok were weighing options, including restrictions on viewing by American users rather than an outright sale to a U.S. buyer.
Reports indicate that ByteDance, the owner of TikTok, received a notification from Chinese authorities. It was suggested that blocking access to TikTok for U.S. users might be preferred over a sale to any American investor. A WSJ source noted that the Chinese Ministry of Commerce urged Washington to respect Chinese laws and stop pressuring the company. ByteDance is believed to anticipate that China could restrict any sale of TikTok, including its source code, as a safeguard for national interests.
Forbidden cannot be sold
The question surfaced in China on March 13 after the United States House of Representatives passed legislation titled Protecting Americans from Applications Used by Foreign Adversaries. The measure aims to remove TikTok from its parent company ByteDance or restrict the popular platform within six months. Authorities argued the app could threaten national security by collecting American user data and transmitting it to the Chinese government.
The bill’s fate was being debated in the Senate, with President Joe Biden signaling willingness to sign it if approved by both chambers on March 9. The Republican contender Donald Trump also spoke in favor of addressing perceived security risks posed by TikTok but argued that a ban would not be necessary to counter those concerns. He contended that blocking the app could boost the standing of Meta, a company he has criticized, though he did not advocate an immediate sale of TikTok.
Forced sale
Former U.S. Treasury Secretary Steven Mnuchin expressed readiness to mobilize investors for a TikTok acquisition, suggesting the platform could command a valuation near the hundred billion dollar mark. The Wall Street Journal cited estimates showing TikTok’s U.S. revenue reaching about 20 billion dollars in 2023.
The publication noted that Chinese authorities have pledged to prevent a forced sale of TikTok in the United States on the grounds that the company handles sensitive technology. Even if a deal were to occur, Beijing would seek to block the sale of the platform along with its source code to maintain strategic control. Without the source code, the deal would lose its meaning, as reported by the WSJ.
On March 14, He Yadong, a spokesperson for the Ministry of Commerce of the People’s Republic of China, asserted that Beijing would respond to the United States’ intent to ban TikTok to protect its legitimate rights and interests. He emphasized that Washington should cease applying what was described as unreasonable pressure on foreign technology firms operating in the United States, urging U.S. officials to foster an open, fair, and nondiscriminatory environment for all investors in the American economy.