China has introduced new export rules that threaten Donald Trump's instructions for the forced sale of TikTok in the US to a non-Chinese company.
Last Friday, Chinese officials revised the rules that govern the export of technology such as voice and text recognition, and data processing. The news was reported by CNN, whose sources say the changes were meant to "formalize the management of technology export" and "protect national security." CNN Business describes the changes as a bid by China to protect its homegrown technology.
The Chinese Ministry of Commerce and Ministry of Science and Technology posted the notice but did not name TikTok outright. However TikTok is owned by Chinese firm ByteDance, and it is believed TikTok does qualify as a ‘technology export.’
The sharks are circling
President Donald Trump threatened to ban the app unless ByteDance sold off TikTok’s US operations this month, along with its Canadian, Australian and New Zealand operations. The US has claimed the app is a threat to national security and given businesses until September 20 to stop working with TikTok.
TikTok is now suing the US government to block President Trump's executive orders to make it sell up citing the move as heavily politicized.
The current climate surrounding the app has prompted entire government departments and companies to start telling staff to delete the app.However, US companies are interested in taking over the company’s US division as it has access to hundreds of millions of users and could be a lucrative source of advertising revenue.
Potential buyers include a joint bid from Microsoft and Walmart. Tech firm Oracle is joining the race as well – the latter getting a nod and wink from the US President himself.
Last week, CEO Kevin Mayer resigned after just months on the job, saying he never signed up for the political drama. The ex-Disney exec resigned in a memo to employees just four months into his role.
The UK is also playing with the idea of banning the app. Any decision is subject to a review by the PM’s chief of staff, Eddie Lister, who is said to be attempting to find out whether TikTok poses a security threat like Huawei. A source told Bloomberg, that the UK is unlikely to force TikTok to sell anything off, but may stop the app from moving British users’ data out of the country.
TikTok is known for offering users a seemingly endless scroll of short videos and for AI algorithms that keep the feed addictive.
Shirley Yu, visiting fellow at the London School of Economics said if the US succeeded in forcing TikTok to sell to an American company then more Chinese companies would be similarly targeted by the US.
China has also been threatening to tighten up its technology exports for some time. A report by Rouse in July 2018, cited China increasing anxiety over losing domestic innovations to commercial takeovers.
The report read: "This status quo is threatened by China’s drive to secure access to key technologies through ownership and restrictions on transfers, all in an effort to protect domestic innovation."
