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Tuesday Sep 22 2020
By
Reuters

China unlikely to approve TikTok's deal with Oracle: report

By
Reuters
Over the weekend, ByteDance and Oracle announced they had reached a deal that would satisfy Trump’s call for TikTok to be sold to an American buyer or face shutdown in the United States. Photo: Reuters/File

SHANGHAI: The Chinese government is unlikely to approve ByteDance's deal with Oracle Corp and Walmart Inc over the future of its video-streaming app TikTok, newspaper Global Times said in an editorial

China's ByteDance has said it will create a US subsidiary, TikTok Global, that will be part-owned by Oracle and Walmart - which in turn said TikTok Global’s board would comprise mainly Americans - to pacify the administration of US President Donald Trump which had planned to ban TikTok on security grounds.

“It is clear that these articles (terms) extensively show Washington’s bullying style and hooligan logic. They hurt China’s national security, interests and dignity,” said the English version of the editorial published late on Monday and which was also carried in the newspaper’s Chinese edition.

The unidentified author objected to a requirement that four of the five board seats of TikTok Global be occupied by Americans and only one reserved for a Chinese national, as well as the inclusion of a US-approved “national security director”.

It also denounced a requirement that ByteDance reveals TikTok’s source code to Oracle as part of the latter’s stake purchase, as well as the separate management of TikTok from Chinese equivalent Douyin.

“As TikTok and Douyin should have the same source code, this means the US can get to know the operations of Douyin,” the editorial continued.

“If the reorganisation of TikTok under US manipulation becomes a model, it means once any successful Chinese company expands its business to the US and becomes competitive, it will be targeted by the US and turned into a US-controlled company via trickery and coercion, which eventually serves only US interests,” the author wrote.

Read more: China's ByteDance gets Trump's approval to avoid TikTok shutdown

The Global Times is a tabloid published by the People’s Daily, the official newspaper of China’s ruling Communist Party, but does not speak on behalf of the party and government unlike its parent publication.

Over the weekend, ByteDance and Oracle announced they had reached a deal that would satisfy Trump’s call for TikTok to be sold to an American buyer or face shutdown in the United States.

However, both sides have framed the deal differently in public statements.

ByteDance has said TikTok Global will be its subsidiary of which it will own 80%.

Oracle has said ByteDance’s ownership would be distributed to ByteDance’s investors, many of which are US-based and that the Beijing-based firm itself would have no stake in TikTok Global.

The deal requires approval from regulators in both Beijing and Washington.