Hong Kong
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Donald Trump’s much-noticed call with Xi Jinping failed to complete the much-anticipated deal to spin off Tiktok’s US business, but the top Chinese leader has shown his blessings on the plan as long as it matches Beijing’s interests.
At first glance, Beijing’s willingness to play the ball in Tiktok appears to be a sharp reversal against abandoning control of the viral video app from years of resistance.
But rather than succumbing to Trump’s pressure campaign, analysts say Chinese leaders are using apps cherished by the US president and millions of Americans to extract other, more consequential concessions.
And judging from comments from Chinese officials and state media reached by the US and China in Madrid this week, it appears that Beijing intends to maintain ownership of Tiktok’s most valuable assets. The algorithm helped attract 170 million Americans and over 1.5 million users worldwide.
But it raises questions about how the arrangement will comply with US laws regarding Tiktok. This explicitly eliminates cooperation in “operating content recommendation algorithms.”
On Friday, Trump alleged that he and Xi “approved the Tiktok deal” following a nearly two-hour call. However, Beijing has rarely been proposed to suggest that the deal will be finalized, and instead shows that it will remain an ongoing work.
China’s reading cited Trump to say that he is happy that productive commercial negotiations in line with market rules will comply with Chinese laws and regulations and lead to solutions that take into account the benefits of both parties.
XI also urged the United States to “restrain unilateral trade restrictions” and “provide a publicly undiscriminatory environment for Chinese investors,” according to a read released by China’s Foreign Ministry.
It remains unclear what Beijing got in exchange for green light negotiations over the sale of Tiktok, one of the biggest global success stories of tech industry rise. Owned by Chinese company Bytedance, the app is not available in China, a highly censored market dominated by sister app Douyin.
According to Chinese readings in Madrid’s speech, the “Fundamental Framework Consensus” agreed on the Tiktok also covered “reducing investment barriers and promoting related economic and trade cooperation.”
Chinese leaders are well aware of Trump’s desire to run Tiktok in the US. Since returning to the White House, he has repeatedly extended the deadline to ban the highly popular app. He believes he helped him beat the younger voters in last year’s presidential election.
“Given Trump’s 180-degree turn and now his interest in Tiktok’s possession, Beijing likely has cleverly utilised an app that is less important to political establishment than the Magazine Movement Core to secure concessions.”
These concessions could include easing US semiconductor export controls, particularly investment restrictions on Chinese capitals entering the US, as well as the possibility of tariffs on China, he added.
“In short, the Chinese state has allocated the Tiktok issue as a negotiation tip to ensure more advantageous concessions in other policy areas,” Wong said.
Beijing’s willingness to cooperate with Tiktok has shown flexibility to deal with the state of fluctuating bilateral relations with mercury Trump, experts say.
“We are pleased to announce that we are a great opportunity to help you,” said Yun Sang, China Program Director at Stimson Center Think Tank in Washington.
But the background has changed dramatically, she said.
“Now, Beijing saw an opportunity to improve our relationship with us, and Tiktok suddenly moved from a “problem of principles” to a negotiable issue.
Beijing, which once denounced Trump’s first-term bid to force the sale of Tiktok as a “daylight robbery,” now portrays the latest deal as “mutually beneficial,” emphasizing respect for corporate will and market principles.
“China has reached a relevant consensus with the US on the Tiktok issue because it is based on the principles of mutual respect, peaceful coexistence and cooperation that is beneficial to both parties,” People’s Daily, the official mouthpiece of the dominant Communist Party, said in a commentary on Wednesday.
China will consider exporting Tiktok’s technology and intellectual property licenses needed to complete the transaction, the commentary added.
The key obsession point of this transaction is the secret source at the heart of global success, the fate of Tiktok’s AI-driven recommendation algorithms.
Wang Jingtao, deputy director of China’s Cyberspace Agency, said the transaction could include methods such as outsourcing the operation of Tiktok’s US user data and content security services, including its algorithms and licenses for intellectual property rights.
“The key issue we understand from Beijing’s side has always been about algorithms and Baitedan’s IP,” said Trey McArver, co-founder of research firm Trivium China.
“For a long time, the red line on the Chinese side has been an algorithm,” he said, adding that the sale of the technology was deemed unacceptable by Beijing.
In 2020, when Trump first tried to force the sale of Tiktok, China placed a number of technologies considered sensitive under export control, including those that allow recommendations for personalized content based on data analysis, like Tiktok’s powerful algorithms.
CUI Fan, a Beijing economics professor and adviser to China’s Ministry of Commerce, noted that Tiktok’s technology is limited, not a ban on exports. The Chinese government will likely conduct reviews and issue export licenses for technology, so the ordinance will allow them to grant permission to use Tiktok, he said in a social media post before the call to XI-Trump.
The two leaders last spoke on the phone in June. They returned from the brink of collapse and led to a fragile tariff ceasefire among the nations. It was then extended until November. The two are competing to launch a broader deal to resolve trade differences and long-term disputes.
On Friday, Trump said he will meet XI at the APEC summit in South Korea next month, and will visit China early next year. The leader also agreed to XI to come to the US “at the right time,” Trump said.
Compared to the summit on the bystanders of multilateral events, “Beijing would clearly prefer meetings in China, because they have control over everything,” said McArver of Trivium.
“I don’t think they’re going to give up things in negotiations to get there,” he added. “But they may be able to make the visit look more appealing.”
