Possibility of TikTok Sale as Part of 'US-China Reconciliation'
Chinese Foreign Ministry: "The US Must Uphold Market Economy Principles"
Chinese authorities are reportedly considering selling the U.S. operations of their popular video app 'TikTok' to Elon Musk, CEO of Tesla.
Bloomberg News cited multiple anonymous sources on the 13th, reporting that Chinese authorities are evaluating this option as a potential contingency plan in case the so-called 'TikTok Ban Act' is enforced in the United States. This appears to be a measure in preparation for the 'TikTok Ban Act' set to take effect on the 19th.
The 'TikTok Ban Act,' passed by the U.S. Congress in April last year, prohibits TikTok's parent company, China's ByteDance, from operating in the U.S. unless it sells its American business rights to a U.S. company. Once the law is enforced, the TikTok app will be removed from U.S. app stores, and existing users will no longer be able to receive updates.
Chinese senior officials began reviewing the TikTok issue during discussions on cooperation with the second Trump administration. Elon Musk, who operates a Tesla factory in Shanghai, is being mentioned as an ideal candidate to acquire TikTok. Musk is regarded as a key figure behind Trump’s election victory and is expected to lead the newly established Department of Government Efficiency (DOGE), created to restructure the U.S. government.
If Musk acquires TikTok through his social media platform X (formerly Twitter), he could secure 170 million users and leverage the vast amount of data accumulated by TikTok. Additionally, Musk’s AI company xAI is expected to be able to utilize TikTok’s data.
Sources explained that since Chinese authorities hold the so-called 'golden shares,' TikTok’s fate is not solely in the hands of ByteDance. Golden shares refer to shares that grant influence over a company’s key decision-making processes.
TikTok claims that the golden shares only affect its Chinese affiliate Douyin, but it is not free from Chinese government oversight.
The Chinese government prohibits the overseas sale of software algorithms developed by domestic companies, and TikTok must obtain government approval to sell core technologies such as its recommendation engine.
The TikTok Ban Act, passed by the U.S. Congress in April last year, stipulates that if ByteDance does not sell TikTok’s U.S. business rights to an American company citing national security concerns, TikTok will be banned in the U.S. starting from the 19th.
TikTok filed lawsuits in U.S. courts, but both the first and second trials ruled there were no legal issues. TikTok then requested an injunction from the U.S. Supreme Court to halt the law’s enforcement, but the likelihood of approval is considered low.
Bloomberg requested comments from the Chinese Ministry of Commerce, the Cyberspace Administration of China (CAC), ByteDance, and TikTok, but these entities declined to comment.
Meanwhile, Chinese authorities stated that the discussions are in the early stages and no agreement has been reached among officials. TikTok refused to comment on the report, calling it 'complete fiction.' Guo Zhaokun, spokesperson for the Chinese Ministry of Foreign Affairs, said, "We will not respond to hypothetical questions," while urging the U.S. to provide a fair investment environment.
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