China Says They Will Oppose Cohered Divestiture Of TikTok

China responded for the first time to a Biden administration demand that the short-video app sell itself of its Beijing-based parent company ByteDance Ltd. or risk a nationwide ban by stating that it would vehemently reject any forced sale of TikTok.

The remarks were made hours before TikTok CEO Shou Zi Chew speaks Thursday at a Senate hearing over worries about user data and national security. They situate TikTok in the context of technologically-based geopolitical tensions between the United States and China.

According to China's Commerce Ministry, a sale or divestiture of TikTok would involve exporting technology and require Chinese government approval. Shu Jueting, a spokesman for the ministry, said that the supposed plans of the Biden administration would cause foreign investors to lose a lot of faith in the U.S. She stated that China would vehemently reject the coerced sale if the reports were accurate.

The Biden administration has demanded that the Chinese owners of TikTok sell their holdings, citing national security worries that Beijing would gain access to user data from US users and sway the media that Americans watch.

On Thursday, Mr. Chew will be questioned over worries about the security and safety of the widely used Chinese-run platform in the United States. He has said that separating the business from its Chinese owners wouldn't provide any more security than the enormous plan TikTok has already put up to ringfence customer data from the United States.

Beijing has made it clear more and more that it wants to safeguard Chinese technology. It recently attempted to alter a legislation limiting the export of Chinese-developed content-recommendation algorithms, which attorneys say is a reminder that Beijing has a role to play in each arrangement and is the secret to TikTok's international success.

China added algorithms to an export-control list in 2020, when the Trump administration was lobbying for the sale of TikTok's American operations. Any agreements involving the transfer of these technologies created in China to a party outside of the nation now need to be approved by the government.

At the time, ByteDance said that it had requested government approval for the tentative arrangement it had made with Oracle Corp. and Walmart Inc. to establish a new US company, TikTok Global. The plan ultimately fizzled out, and according to China's official records, ByteDance has never had a tech export authorization granted.

Those familiar with the company claim that TikTok's recommendation algorithm was initially derived from algorithms and artificial intelligence models built by its parent, despite the fact that the app's systems are hosted on servers in Singapore and the US. According to them, TikTok and Douyin, a video-sharing app with a focus on China developed by ByteDance, share a similar algorithm architecture.

Despite the fact that Beijing officials haven't formally stated it, ByteDance executives believe China is quite likely to prevent the sale or spinoff of TikTok's American operations, according to sources with knowledge of the situation. According to them, the authorities have urged ByteDance to tenaciously protect its interests.

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