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BEIJING: China’s new rules on technology exports mean that ByteDance’s sale of TikTok’s operations in the United States could need approval from Beijing, a Chinese trade expert told state media, a requirement that would complicate forced divestment and politically charged.
President Donald Trump ordered ByteDance to ditch the short video app TikTok, which defies the order, in the United States amid security concerns about the personal data it handles.
Microsoft and Oracle are among the suitors for the assets, which also include TikTok’s operations in Canada, New Zealand and Australia.
However, on Friday night China reviewed a list of technologies that are banned or restricted for export for the first time in 12 years and Cui Fan, a professor of international trade at the University of International Business and Economics in Beijing, said the changes would apply. to TikTok.
“If ByteDance plans to export related technologies, it should go through licensing procedures,” Cui said in an interview with Xinhua published on Saturday.
China’s Ministry of Commerce added 23 items, including technologies such as data analytics-based personal information delivery services and artificial intelligence interactive interface technology, to the restricted list.
It can take up to 30 days to obtain preliminary approval to export the technology.
TikTok’s secret weapon is believed to be its recommendation engine that keeps users glued to their screens. This engine, or algorithm, powers TikTok’s “For You” page, which recommends the following video to watch based on an analysis of your behavior.
Cui noted that ByteDance’s overseas development had been based on its domestic technology providing the core algorithm and said the company might need to transfer software codes or usage rights to the new owner of TikTok from China abroad.
“Therefore, it is recommended that ByteDance seriously study the adjusted catalog and carefully consider whether it is necessary to suspend” negotiations on a sale, he added.
ByteDance did not immediately respond to a request for comment on Sunday.
China’s Foreign Ministry has said it opposes the executive orders that Trump has imposed on TikTok and that Beijing will defend the legitimate rights and interests of Chinese companies.
