While President Trump is looking to get ByteDance to sell off TikTok to a US company, China is vowing not to allow the "theft" of TikTok. Or as the Chinese government also put it, the "smash and grab" of the popular app.
An editorial posted on the China Daily publication today stated that:
After vowing to ban the popular short-video sharing app TikTok in the United States on Friday, the US president is reportedly weighing the advantages of allowing Microsoft to purchase its US operations.Advertisement
Such shilly-shallying is a tactic the US administration employed during the trade deal negotiations with China.
The editorial also notes that the TikTok experience has showed us that "no matter how unfounded the claims against them are, as long as they remain a Chinese company they will be presented as a "red threat"."
This is true, not only of TikTok but also as Huawei. Another company that the US has essentially banned from the country. Claiming that Huawei is run by the Chinese government and used to spy on people. Without showing any proof of such wrongdoing.
Selling TikTok might be preferable to being banned, for ByteDance
For ByteDance, the ability to sell TikTok – at least its US operations – would be preferable to being banned in the country. TikTok is already banned in India and that is costing the company $6 billion. Being banned in the US would be a significant blow as well, considering it is their third largest market (India was one and China is second largest).
However, China is still not happy with this. Stating that Secretary of State, Mike Pompeo's comments on the Sunday shows this weekend is "tantamount to inviting potential US purchasers to participate in an officially sanctioned "steal" of Chinese technology."
China has a point there. The US is basically giving TikTok to the highest bidder, which might be Microsoft.
China won't accept the "theft" of TikTok
China isn't going to accept this "theft" of a technology company. And no one expected that to happen.
The editorial also says that China has "plenty of ways to respond if the administration carries out its planned smash and grab."
Having said all of this, these are bold words coming from China. They are clearly upset that Trump is looking to make TikTok American once again. TikTok is a big deal for China. As it is their first really viral app that is viral in almost every country. At least the three big markets – India, China and the US. Which means it was bringing in a ton of money for China.
Losing TikTok would be huge for China. But for ByteDance, it means that they will at least get their investment back. They paid up to $1 billion for musical.ly in 2017, and it's pretty obvious that TikTok is going to be worth much more than that. Even if Microsoft only buys TikTok in a handful of countries – as has been reported so far.