How did China react to the US's request to sell TikTok?
(Baonghean.vn) - On March 13, the US House of Representatives passed a bill requiring ByteDance to divest from TikTok within 6 months so that the application can exist in the US. However, China said that this was an act of "bullying" and "unfair competition".
Mr. Wang Wenbin, spokesman for the Chinese Foreign Ministry, said on March 14 that the US bill “contradicts the principles of fair competition and international trade rules.”
China is believed to be determined to block the deal, as this is not the first time the issue has been raised.
Last year, the Committee on Foreign Investment in the United States (CFIUS) also told ByteDance to divest TikTok or face a ban. At the time, Shu Jueting, a spokesperson for China’s Ministry of Commerce, said the country would “firmly oppose” any US move to force a sale of TikTok.
Complicating the TikTok sale is the app’s algorithm, which is considered the “secret sauce” and is the technology that allows TikTok to suggest content to users to keep them engaged.
Last year, when CFIUS asked ByteDance to sell TikTok, Ms. Shu Jueting - spokesperson for the Chinese Ministry of Commerce mentioned this issue and said that divesting or selling TikTok essentially means exporting this technology, which must go through administrative licensing procedures.
There is talk that China would have to approve the transfer of the algorithm as part of a TikTok sale, which seems highly unlikely. And it’s hard to imagine TikTok’s US business being separated from the algorithm if China doesn’t want that to be part of the deal.
TikTok is one of the world's largest social media apps, posing a serious challenge to rivals like Meta (Facebook's parent company) and Snap. According to Sensor Tower, a US-based market research firm, TikTok will be the most downloaded social media app in the US by 2023.
Angelo Zino, Vice President and Senior Equity Analyst at CFRA Research (USA), commented that it is possible that TikTok's business segment in the US market alone "could achieve a valuation of over 60 billion USD".
However, selling TikTok in the US is still fraught with difficulties. The algorithm has not been worked out and the Chinese government may not approve the deal, so a valuation for TikTok is still far from certain.
