Chinese authorities appear to be softening their stance on the fate of TikTok, possibly paving the way for Beijing-based ByteDance to begin talks with American investors, according to a report, citing people familiar with the matter.
According to a South China Morning Post report, citing a person who was briefed on the Chinese government’s considerations, with US President Donald Trump’s recent eagerness to reach an agreement on TikTok, Beijing recognises the importance of establishing a fair arrangement to enhance bilateral relations.
On Day 1 in the White House, Trump signed an executive order that postpones federal enforcement of a law requiring American companies to cease hosting TikTok unless ByteDance sells its US operations.
Trump indicated a willingness to allow a US entity to acquire a 50 per cent stake to ensure the app remains available to its 170 million users in the country, reported South China Morning Post.
Trump also warned that he would impose additional tariffs on Chinese imports if Beijing fails to approve a deal.
“We may have to get an approval from China too. I’m not sure, but I’m sure they’ll approve it,” South China Morning Post quoted Trump as saying.
The Chinese government has not directly addressed Trump’s request. However, China’s foreign ministry recently has recently softened its rhetoric about a potential deal.
Foreign ministry spokeswoman Mao Ning said at a press briefing this week that corporate operations and acquisitions “should be determined by businesses based on market principles.”
“If Chinese companies are involved, the deals should comply with Chinese laws and regulations,” she was quoted as saying at a separate briefing.
According to the report, the statement marked a significant change in tone from the last time China’s foreign ministry commented on the TikTok situation.
Previously, Beijing’s official stance was that it strongly opposed US actions against Chinese companies under the guise of national security, added the report.
In 2020, Beijing cautioned the US about the “consequences” of a TikTok ban, comparing it to “opening Pandora’s box.”
Meanwhile, Trump said that he discussed TikTok with President Xi Jinping during their most recent phone call on Friday.
“It is my expectation that we will solve many problems together, and starting immediately. We discussed balancing trade, fentanyl, TikTok, and many other subjects,” he said in a post to his Truth Social platform.
Trump’s demand that the US get 50 per cent of TikTok is “blackmail”, South China Morning Post quoted another person briefed on considerations for a deal as saying.
“But it is better than giving away 100 per cent,” the person added.
According to the report, analysts suggest that China and the US may be moving closer to a resolution regarding TikTok’s future.
TikTok CEO Chew Shou Zi attended Trump’s inauguration on Monday, alongside other prominent tech figures such as Tesla CEO Elon Musk and Amazon founder Jeff Bezos.
Thomas Liu, founder and CEO of the consultancy Policy Nexus, told South China Morning Post that the tone from both parties indicates that “the deal might be ongoing already, even before Trump’s inauguration”.
However, it remains uncertain how any potential agreement would comply with the law, which stipulates that ByteDance cannot retain control over an app operating in the US.
However, an arrangement “involving regulatory compliance, transparency measures, and possibly US-based ownership could serve as a model for navigating the intersection of international business and geopolitical tensions,” Liu was quoted as saying.
In China, ByteDance informed several media outlets that it has not finalised a deal with the US government.
Publications like Yicai and 36Kr reported that TikTok resumed operations after briefly blocking access in the US, as the government chose not to enforce the law immediately.
The law, which imposes a January 19 deadline for ByteDance to divest TikTok’s US operations, does not prohibit TikTok from delivering content to American users. However, US hosting providers cannot legally support TikTok while it remains under ByteDance’s ownership. Although the law remains in effect, enforcement is currently delayed.
A major hurdle for a potential divestment is China’s reluctance to allow ByteDance to export its valuable algorithm, which is crucial to TikTok’s success. Nonetheless, a deal might still be feasible without transferring ownership of the algorithm, according to a source familiar with the government’s discussions.
“After all, it is not difficult for potential American shareholders to find a good algorithm given the app’s large US user base and content stock,” the person was quoted as saying.
With inputs from agencies