TikTok troubles narrow gap between Beijing and ByteDance founder Zhang Yiming

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ByteDance founder Zhang Yiming has long positioned himself as a global internet entrepreneur, largely eschewing Chinese government involvement, but U.S. demands to sell his crown jewel TikTok are testing the boundaries with Beijing.

A year ago, ByteDance was approached by the Chinese government with offers of help when TikTok, a short-video software with an enormous following among young people globally, faced political heat in India, a source acquainted with the problem told Reuters. However the company sent only mid-level staff to meet up with government officials, signaling that the business wished to go it alone.

The 38-year-old Zhang, who has trodden a different path to other high-profile Chinese tech tycoons, shifted tack in August when President Donald Trump threatened to ban TikTok in the United States unless it had been sold to a U.S. firm.

Zhang's team sought a gathering on his behalf with China's ambassador in Washington, Cui Tiankai, two sources acquainted with the matter said.

While Zhang was only hoping for an informal speak to Cui to seek advice, his approach was regarded as a turning point, government and industry sources told Reuters.

The embassy directed the ByteDance team to the foreign ministry in Beijing. Although no more talks occurred, and Cui and Zhang didn't speak, the Chinese government interpreted the approach as a sign that ByteDance was open to assistance.

China entered the fray on August 28, by revising a tech export control list that authorities said would provide them with regulatory oversight over any TikTok deal. Reuters could not determine if Beijing's interpretation of Zhang's approach and the Chinese government move were linked.

Among the sources said that by standing up for ByteDance, Beijing wanted to show private companies caught in the crossfire of China-U.S. strategic competition that the united states is firmly in it.

"We want to show all the countries that this is what the Chinese government will do if you bully some of our companies, so don't follow what the U.S. is doing," the foundation said.

The diplomatic dance taking place around TikTok follows years of acrimony between Washington and Beijing over the role of China's Huawei Technologies, that your U.S. has alleged is effectively a Trojan horse for Chinese espionage.

Huawei and Beijing have repeatedly denied such activity.

Asked about its engagement with ByteDance, a Chinese foreign ministry spokesman said he had not been aware of the specifics of the situation, adding that america was over-generalising the idea of national security and abusing its power.

"Not merely does it not in favor of market principles and international rules, this is a mockery to the principles of market economy and fair competition that the U.S. prides itself on," he added.

A senior U.S. administration official said China had blocked U.S. tech companies such as for example Facebook and Twitter for years and the United States' actions were made to protect the personal information of its citizens.

"We're just very concerned that, essentially, whatever could possibly be done on that platform would be at the mercy of the Chinese Communist Party's algorithmic attempts to regulate human behavior worldwide."

The Chinese embassy in Washington didn't immediately react to a obtain comment. ByteDance declined to comment.

TikTok has said it could not adhere to any request to talk about user data with the Chinese authorities.

'POLITICAL FOOTBALL'

China had formerly considered accelerating the launch of an"entity list" to punish foreign companies, groups and people deemed bad for its interests, a government source with direct knowledge of the matter said.

But this is dropped as a countermeasure to the Trump administration's proceed to ban transactions with ByteDance and Tencent's WeChat since it would have escalated tensions and was replaced instead by the guidelines published last week.

Zhang did not know of the tech export rule revisions ahead of time, two sources told Reuters, and the business's view is that it ultimately prefers to be absolve to make its own decisions, according to one of the sources. Others close to the TikTok sale talks say the move threw a spanner in the works of already-complicated negotiations and could scupper any deal.

China's commerce ministry, which published revisions to the tech export control list, didn't respond to a obtain comment.

ByteDance is negotiating with a Microsoft-Walmart coalition, and a competing investor consortium led by software firm Oracle, on a sale of TikTok that may be worth just as much as $30 billion.

ByteDance continues to be keen not to turn into a "political football" and prefers to use legal means instead of depend on government backing to resolve the issue, the foundation said. The business is suing to block among Trump’s orders.

"I doubt getting the government speak up for this company can do much in assisting it gain market access into a different country,” said Chu Yin, a Chinese scholar with the guts for China and Globalization, a Beijing-based think-tank.

"ByteDance might fare better if it could share some interests using its competition in the U.S.," he added.

A DIFFERENT PATH

Zhang has pursued a different way to Chinese internet entrepreneurs such as for example Alibaba founder Jack Ma, who's a Communist Party member, and Tencent's Pony Ma and Baidu's founder and leader Robin Li, who are both members of the Chinese People's Political Consultative Conference (CPPCC), a ceremonial advisory body.

Zhang, who is not really a person in either, has focussed on global growth even as his counterparts have retrenched from overseas and opted to give attention to domestic markets.

This season he appointed new heads for the China businesses to personally take up more responsibility over ByteDance's international business and in addition began moving key research capabilities and decision-making functions abroad. In March, he said in an open letter that he spent two-thirds of 2019 overseas.

He has personally sought advice from around ten people at U.S. think-tanks and former U.S. government officials recently, a source acquainted with the situation said.

Zhang in addition has taken numerous steps to assuage U.S. concerns that TikTok could be endangering Americans by collecting personal data and censoring political content.

He hired former Disney exec Kevin Mayer as TikTok CEO, moved TikTok content moderation work outside China and established a "transparency center" in the U.S. to provide outsiders usage of observe TikTok's data security practices and policies. 
Source: https://japantoday.com

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