Close

China Unlikely to Approve TikTok Deal, State Media Reports

September 22, 2020 9:43 pm

Beijing (PingWest)- China is unlikely to approval TikTok deal that Oracle Corp and Walmart said they have reach agreement with ByteDance to set up a new mainly U.S-owned company, Chinese state media Global Times reported.

Under the agreement, Oracle and Walmart have said they would set up a new entity called TikTok Global, with a board of directors consisted mainly of Americans. Oracle will also be able to review the app’s source code.

In contrast, ByteDance said in a post that it would launch a pre-initial public offering for TikTok Global, in which ByteDance would hold an 80% stake after the financing. The board member would include ByteDance’s founder Zhang Yi Ming, ByteDance’s existing board member and Walmart’s CEO.

The publication, often seen as being close to Beijing’s thinking, called the deal “unfair” on Monday and accused Washington of “bullying” because of the specific terms of the deal.

“From the information provided by the U.S, the deal was unfair. It hurt China’s national security, interests and dignity. It’s hard for us to believe that Beijing will approve such an agreement,” Global Times said in a statement, echoing comments on Twitter the same evening from its editor-in-chief, Hu Xijin.

On Monday, TikTok parent company ByteDance released a statement in which it clear up rumors around the deal. ByteDance said it would retain control of TikTok Global with an 80% stake in the company and said it would not transfer any algorithm or technology to Oracle, but Oracle will have the authority to access the source code of TikTok USA for security checks.

In the post, ByteDance also denied that it had committed to pay USD 5 billion in taxes to the U.S Treasury or to create a U.S education fund worth USD5 billion under the term of the deal.

The statement contradicts President Trump’s claim that the Chinese company wouldn’t have anything to do with TikTok after the deal was sealed, and that Oracle and Walmart would have total control over the app.

On Tuesday, Global Times’ editor in chief Hu Xi Jin responding to comments Trump made to Fox News about how TikTok Global was going to be controlled by U.S companies, said in a post “There is no way the Chinese government will accept the demand.”

The deal seems to have received approval from the US government, it is also pending the green light from Chinese authorities.

China’s Ministry of Commerce updated its export control in August 28 that revised a list of technologies that are restricted for export. The list has cover AI-based algorithm, which is the core of TikTok’s recommendation engine, it recommends the video content to users based on analysis of their preference