Editorial | TikTok deal could show way forward for US-China engagement
The agreement, under which the platform will become a joint venture controlled by a consortium of investors, highlights the importance of negotiation and mutual respect
What was supposed to be a forced sale on national security grounds is now a joint venture. In response to a question, Chinese Ministry of Foreign Affairs spokesman Guo Jiakun said the country’s position on the matter had been clear and consistent, indicating no obvious objections from Chinese authorities. A breakthrough came in September after a round of talks between Chinese and US delegations held in Madrid, followed by a pivotal phone call and then a face-to-face addressing a wide range of bilateral issues between Trump and President Xi Jinping in Busan, South Korea, in October.
If all else works out, the agreement shows negotiation and mutual respect, rather than belligerence, between the rival powers are the only ways to move forward. Washington initially claimed the need for national security to demand a forced sale of the popular social media platform used by half the American population. That figure alone made an outright ban impossible without antagonising TikTok’s users, including many who made a living off it. It also gave Beijing, TikTok and its Chinese parent ByteDance significant leverage.
It’s still curious, though, that TikTok was allowed to operate for so long if it was such an immediate security threat. Beijing stuck to its guns and demanded the commercial interests of Chinese companies be respected. As a Chinese Ministry of Commerce spokesperson stated back then, Beijing expected the US to “provide an open, fair, equitable, and non-discriminatory business environment for the continued operation of Chinese companies, including TikTok”.
China considers the deal’s commercial terms and interests as paramount while conforming to US laws, and that is how it has mostly turned out. The new entity will be called TikTok USDS Joint Venture LLC. It will have complete power and responsibility to handle US data protection, algorithm security, content moderation and software assurance.
A consortium – led by US technology giant Oracle and including US and international investors such as Silver Lake and Abu Dhabi-based MGX – will own 50 per cent of the US entity. Affiliates of existing ByteDance investors will hold 30.1 per cent, while ByteDance will retain 19.9 per cent.