China adopts new rules that thwart TikTok sale ahead of US ban

China appears to be putting up roadblocks to TikTok parent ByteDance’s efforts to divest the video-sharing app’s US operations to comply with President Trump’s orders to sell it to a US company by September 15 or see it shut down in the US.

The Chinese Ministry of Commerce added 23 items Friday to a list of technologies that require Beijing’s OK before they can be exported. They reportedly include artificial-intelligence technology that plays a key role for TikTok, which uses an algorithm to feed users a stream of videos based on their preferences and behavior.

That means ByteDance will likely have to go through Beijing’s licensing procedure to transfer its software code out of China to the US, according to Wedbush Securities analyst Daniel Ives. President Trump has given the company until Sept. 15 to divest TikTok’s US operations.

“This is clearly directed at slowing down ByteDance’s deal negotiations in this game of high stakes poker,” Ives said in a Monday note.

The move forced ByteDance to parse the new regulations over the weekend, when it was expected to start exclusive negotiations with one of the suitors for TikTok, The Wall Street Journal reported Sunday. Nevertheless, CNBC reported Monday that TikTok had chosen a buyer for its businesses in the US, New Zealand and Australia and could announce a deal as soon as Tuesday.

A joint bid from Microsoft and Walmart is considered the leading contender, but other suitors reportedly include software giant Oracle and rival video app Triller, which claimed Friday that it had made a $20 billion bid with Centricus Asset Management.

“We are studying the new regulations that were released Friday,” ByteDance general counsel Erich Andersen told The Post in a statement. “As with any cross-border transaction, we will follow the applicable laws, which in this case include those of the US and China.”

China’s new rules added another geopolitical dimension to TikTok’s blockbuster negotiations. Trump has threatened to ban the app amid concerns that Americans’ user data could be shared with Beijing, charges that TikTok has denied.

China’s state-backed Xinhua news agency published an article Sunday claiming ByteDance will have to follow the export rules to sell TikTok’s US operations, a process that kicked off after Trump signed an executive order banning the app on privacy concerns. Trump and other US officials have raised fears that Beijing-based parent ByteDance could share users’ data with China’s government.   

The agency added that the development of ByteDance’s international businesses “has been built on the strong technical support based in China.”

“It is suggested that ByteDance carefully study the revised catalogue, seriously and carefully consider whether it is necessary to suspend substantive negotiations on relevant transactions, comply with statutory application and reporting procedures, and then take further actions as appropriate,” Cui Fan, a professor at China’s University of International Business and Economics,  told Xinhua.

With Post wires

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