China’s Silence on Potential TikTok Deal Fuels Uncertainty
Following U.S. President Donald Trump’s tentative approval of a deal aimed at preserving TikTok’s U.S. operations on Thursday, Beijing’s muted response has amplified the lingering uncertainties surrounding the platform’s future. Despite Trump’s assertion that he received a “go ahead” from Chinese President Xi Jinping during the deal’s signing, official confirmation and endorsement from Beijing remain conspicuously absent.
Chinese state media outlets have refrained from prominently featuring the deal, and social media discourse has been restrained. A solitary mention appeared on a state-affiliated Weibo account, quoting a Fudan University professor who characterized the agreement as a potentially “win-win” outcome for both the United States and China. However, this isolated comment hardly paints a comprehensive picture of China’s official stance.
The absence of ByteDance representatives during the executive order’s signing further underscores the ambiguous nature of the situation. Requests for comment from ByteDance and the Chinese Embassy in Singapore went unanswered, intensifying speculation about the company’s true position.
Further complicating matters, reports from Chinese media outlet LastPost, citing anonymous sources, suggest that TikTok’s U.S. operations may be structured into two distinct entities. One, a new joint venture company established under Trump’s executive order, would oversee TikTok’s U.S. business, data, and algorithm. ByteDance would retain a minority stake of less than 20%. This structure ostensibly aligns with U.S. national security requirements demanding ByteDance’s divestment from TikTok’s U.S. operations to avert a potential ban.
The second company, also under ByteDance’s umbrella, would reportedly manage e-commerce, brand advertising, and serve as a liaison with TikTok’s international operations. The veracity of these claims remains uncertain, and clarity is needed on how this proposed bifurcation would address the core national security concerns cited by U.S. lawmakers.
The U.S.’s concerns regarding TikTok are rooted in fears that Beijing could exploit user data or manipulate the platform to sway public opinion. A recent Pew Research survey indicates that one in five adults in the U.S. regularly consume news on TikTok, a significant increase from the 3% reported in 2020, highlighting the application’s growing influence as a source of information.
The Supreme Court had previously upheld a law mandating ByteDance’s divestiture from TikTok, setting a deadline that Trump subsequently extended multiple times while pursuing a potential deal. Trump’s initial claim of Xi’s approval followed a nearly two-hour call with the Chinese leader. However, Beijing’s official account of the conversation presented a nuanced perspective.
Xi emphasized China’s willingness to support “productive commercial negotiations” aligned with market principles and Chinese laws, accommodating the interests of both parties. He also urged the U.S. to abstain from “unilateral trade restrictions” and ensure a “fair and non-discriminatory environment” for Chinese investors.
These developments occur against the backdrop of broader trade talks between Washington and Beijing, suggesting that TikTok could become a bargaining chip in negotiations. However, experts suggest that China has limited incentive to permit ByteDance’s divestment, fearing the loss of a strategic asset and potentially setting a precedent for other Chinese tech companies operating abroad.
Any proposed deal could also encounter legal challenges in the U.S., particularly if it deviates from the divestiture conditions stipulated by the Supreme Court-backed TikTok sale-or-ban law.
Speaking on CNBC’s “Squawk Box Asia” on Friday, James Sullivan of JP Morgan articulated concerns regarding the lack of clarity surrounding algorithmic control in Trump’s proposed deal, underscoring that this ambiguity could compromise national security.
The uncertainty surrounding China’s stance and the deal’s structural complexities raise fundamental questions about the effectiveness of the proposed arrangement in addressing the underlying national security risks. The ultimate fate of TikTok in the U.S. hinges on Beijing’s willingness to endorse the deal and on the ability of negotiators to craft an agreement that satisfies both U.S. national security imperatives and China’s economic and strategic interests. The next few weeks will be critical in determining whether a viable compromise can be reached or if the TikTok saga will continue to escalate.
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