Daily Management Review

China Could Have Control Over Sale Of TikTok Due To Its New Export Rules


China Could Have Control Over Sale Of TikTok Due To Its New Export Rules
The Chinese authorities could now have a say on whether to approve the forced sale of the Chinese owned video-sharing app TikTok's US business because of a recent update to technology export rules in the country, according to a report published in the Chinese state media late Saturday quoting a Chinese trade expert.
23 items were added by the Chinese Ministry of Commerce to a list of technologies that are banned or restricted for export on Friday, the ministry announced. This is the first time that the revision of the list has been done in the past 12 years.
According to the report in the state media, the new items include "personalized information service technology based on data analysis" and "AI interface technology."
Professor Cui Fan of China's University of International Business and Economics said in an interview with the state-run Xinhua news agency published late Saturday that the addition of these new categories to the list would also be applicable for TikTok and to the technologies that are held by ByteDance – the Chinese tech company that owns and operates the video-sharing app.
"If ByteDance plans to export-related technologies, it should go through the licensing procedures," Cui said in an interview with Xinhua published on Saturday.
It can take up to 30 days for the preliminary approval to export the technology.
Cui said that the forced sale of TikTok or any part of it to an American company could involve the need for transferring of software codes or usage rights to the new owner of the video sharing app from China to the overseas market.
"Therefore, it is recommended that ByteDance seriously studies the adjusted catalog and carefully considers whether it is necessary to suspend" negotiations on a sale, he said.
The US president Donald Trump had issued an executive order asking ByteDance to sell of TikTok’s US operations to an American company because the Trump administration is concerned that the Chinese company and its app can be a national security threat. The American companies that are in the race to bid for the app include Microsoft Corp and Oracle Corp. the Chinese app claimed that it has about 100 million monthly active users in the US.
An executive order issued by Trump on August 6 effectively banned all American companies form transacting with the Chinese company and its app within a period of 45 days. TikTok is now reportedly preparing for a possible shut down of its US operations if its sell off was not possible with mid-September even though t he company has also filed a lawsuit in the US challenging the executive order. The report also said that the company expects that any shutdown of its US operations would be temporary in nature. 
The top contenders for the purchase of TikTok include the American tech giants Microsoft and Oracle as well as the retailer Walmart that confirmed that it had joined the race earlier this week.
TikTok has said it will challenge Trump's executive order. China's foreign ministry has also condemned the order, saying Beijing will defend the rights and interests of Chinese businesses.