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China complicates TikTok sale ordered by US

President Donald Trump’s administration has threatened to ban TikTok by mid-September and ordered ByteDance to sell its US business.

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The ByteDance headquarters in Beijing, China (AP Photo/Ng Han Guan)

The ByteDance headquarters in Beijing, China (AP Photo/Ng Han Guan)

The ByteDance headquarters in Beijing, China (AP Photo/Ng Han Guan)

The Chinese government is complicating the US government-ordered sale of US TikTok assets.

China has introduced export restrictions on artificial intelligence technology, seemingly including the type that TikTok uses to choose which videos to spool up to its users.

That means TikTok’s Chinese owner, ByteDance, would have to obtain a licence to export any restricted technologies to a foreign company.

President Donald Trump’s administration has threatened to ban TikTok by mid-September and ordered ByteDance to sell its US business, claiming national-security risks due to that Chinese ownership.

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US President Donald Trump (AP/Evan Vucci)

US President Donald Trump (AP/Evan Vucci)

AP/PA Images

US President Donald Trump (AP/Evan Vucci)

The government worries about user data being funnelled to Chinese authorities. TikTok denies it is a national security risk and is suing to stop the administration from the threatened ban.

Prospective buyers for US TikTok assets include Microsoft and Walmart and, reportedly, Oracle. Oracle has declined to comment.

On Saturday, Chinese state-owned media outlet Xinhua News Agency quoted government trade adviser and professor Cui Fan, who said that Bytedance should consider whether it should halt negotiations to sell TikTok in the US.

“As with any cross-border transaction, we will follow the applicable laws, which in this case include those of the US and China,” said ByteDance general counsel Erich Andersen.

The Chinese government’s new restrictions may be a “tactic to drive up valuation” of TikTok, said RBC Capital Markets analyst Alex Zukin, who still expects a deal announcement “relatively soon”.

The Wall Street Journal reported last week that ByteDance is asking for 30 billion dollars for the US operations, but has faced resistance from bidders. The Journal said in a story that deal talks had “slowed”.

Microsoft and Walmart have declined to comment.

PA