Chinese state media have denounced ByteDance’s deal with Oracle and Walmart as “dirty and unfair”, saying Beijing had “no reason” to approve the agreement backed by Donald Trump.
Editorials published by several Chinese state media groups signalled Beijing may not sign off on a deal that could put control of the short-video app in the hands of Americans.
Confusion over who would own and control TikTok Global, the new US-based company that would be created by the deal, was already threatening to unwind an agreement blessed by the White House at the weekend.
China Daily, the state-owned English language newspaper, said the deal was based on “bullying and extortion” on Wednesday, a day after the nationalistic Global Times and the online edition of the Communist Party mouthpiece People’s Daily ran similar opinion pieces.
ByteDance and its would-be American partners have released contradictory statements on key details of the arrangement. The Chinese state media editorials focused on the deal terms as portrayed by Oracle and Walmart.
An Oracle executive said on Monday that ByteDance would have “no ownership” in TikTok Global because of how its shares would be distributed to existing shareholders. Mr Trump has pledged to step in if the new business was not controlled by US companies.
But ByteDance has asserted that TikTok Global would be a “100 per cent” fully owned subsidiary, in which it would maintain an 80 per cent stake after raising funds ahead of a potential initial public offering.
The conflicting narratives extend to who will control the recommendation algorithm at the heart of TikTok and a $5bn education fund that Mr Trump said ByteDance would finance. The Chinese technology group said it first heard about the fund from news reports.
China Daily called the administration’s manoeuvres “a trick to finally take over TikTok . . . It is not the first time the US has played such dirty tricks to bully foreign companies in order to either destroy them or take them over.”
Global Times said China would not “hand over control of an outstanding high-tech Chinese company to extortionists”.
The People’s Daily added: “Facing wolves, you have to fight if you want a chance to survive.”
But state media also took aim at specific areas of agreement, including the decision to reserve four seats on the five-person board for Americans and give Oracle access to review TikTok’s source code.
China Daily said that since TikTok shares code with Douyin, its Chinese sister-app, the agreement would mean “the US would get to know the operation of Douyin”. It added that ByteDance would lose control of its company and its core technology.
Beijing last month prohibited unlicensed exports of recommendation algorithms and ByteDance has said it will need the Chinese government to sign off on any deal.
“China has no reason to give the green light to such a deal . . . Giving in to the unreasonable demands of the US would mean the doom of the Chinese company ByteDance,” said the China Daily editorial.
Get alerts on TikTok Inc when a new story is published