With Trump seemingly warming to the new TikTok deal, another player could foil everything: China. They have the final say and they are already unhappy.
It’s been a long and messy road to get to where we are. Still, a lot about this story is finally seemingly falling into place. Hours before the TikTok ban, a new deal between TikTok, Oracle, and Walmart was hammered out. This after the previous TikTok Oracle deal was rejected.
Trump has already reacted to the deal with a certain degree of approval. That already represents a positive sign that the story might finally be settling down. Unfortunately, Trump isn’t the only entity TikTok must seek approval from. As we’ve been saying all along, China must also approve of the deal. Previously, when Trump rejected the previous deal, the Chinese government described the outcome as “bullying“.
Now that the new deal has been hammered out, though, how is China reacting to all of this? Not well as it turns out. From TechCrunch:
The September 20 deadline for a purported TikTok sale has already passed, but the parties involved have yet to settle terms on the deal. ByteDance and TikTok’s bidders Oracle and Walmart presented conflicting messages on the future ownership of the app, confusing investors and users. Meanwhile, Beijing’s discontent with the TikTok sale is increasingly obvious.
China has no reason to approve the “dirty” and “unfair” deal that allows Oracle and Walmart to effectively take over TikTok based on “bullying and extortion,” slammed an editorial published Wednesday in China Daily, an official English-language newspaper of the Chinese Communist Party.
The editorial argued that TikTok’s success — a projected revenue of about a billion dollars by the end of 2020 — “has apparently made Washington feel uneasy” and prompted the U.S. to use “national security as the pretext to ban the short video sharing app.”
While some might just wave off the Chinese governments opinion on the matter, well, their opinion does matter. This is because China has the power to veto the whole deal in the first place. Right now, TikTok is seeking an export license from the Chinese government to permit the whole deal to move ahead. From CNBC:
TikTok owner ByteDance has applied for an export license in line with Chinese regulations, as it pushes for a deal with Oracle and Walmart for the video-sharing app’s U.S. operations to avoid a shutdown in the country.
The application was submitted to the Beijing municipal bureau of commerce, ByteDance said in a statement in Chinese on Thursday. The company said it was waiting for a decision.
But the statement did not mention the pending deal in the U.S. nor the exact technology it was looking to get a license for export.
So, even if Trump allows the deal to go ahead, TikTok is far from being out of the woods. The hope for ByteDance at this stage is that China will plug their noses and say “yes”. Otherwise, what Trump says about the deal won’t really matter because the deal would fall through anyway. It’s fair to say that things are rather delicate for TikTok at this point in time.