Chinese State Media Declare Victory on TikTok over Oracle, Walmart Deal

Indian mobile users browses through the Chinese owned video-sharing 'Tik Tok' app on a smartphones in Amritsar on June 30, 2020. - TikTok on June 30 denied sharing information on Indian users with the Chinese government, after New Delhi banned the wildly popular app citing national security and privacy concerns. …
NARINDER NANU/AFP via Getty Images

Chinese state media trumpeted this weekend’s tentative deal between China’s ByteDance and U.S. companies Oracle and Walmart for control over the social media platform TikTok as a major victory for the Chinese firm against “U.S. hegemonic suppression.”

President Donald Trump gave the deal his “blessing” over the weekend, at least “in concept.”

“If they get it done, that’s great. If they don’t, that’s okay too,” Trump said.

The deal upon which Trump conveyed his tepid blessing would establish a new company called TikTok Global, to be headquartered in the United States. Oracle and Walmart would own 20 percent of the company, and four of its five board members would be American.

China’s state-run Global Times hailed the deal as a victory for China because it comes up short of the complete American ownership Trump initially demanded, and which many critics of TikTok maintain is the only way to secure the platform against spying and political interference from the Chinese Communist Party (CCP).

The Global Times saw the TikTok deal as a harbinger of the U.S. caving on its stance against Chinese telecom giant Huawei and throwing the towel on “decoupling” from China in the wake of the Wuhan coronavirus horror:

The colossal competition between China and the US has shown features that do not exist in traditional struggles between major powers. The US is very wary of the investment and use of Huawei, TikTok, and WeChat. Some US politicians have even proposed China-US decoupling. The current reality is that decoupling is not easy. US politicians’ attempts may not be able to defeat marketization and globalization.

Previously, teenage users of TikTok in the US strongly opposed the app’s ban in the country. Finally, Trump compromised. TikTok still retains most of the equity and control of the core algorithm, which is far from the US administration’s goal of forcing TikTok to sell itself to its rivals such as Facebook or Microsoft. 

The same is true for Huawei. Over the past two years, the average annual growth rate of Huawei’s mobile phone sales worldwide has exceeded 20 percent. China’s outstanding international companies are merging with globalization. And the US has simply no power to stop it.

The Global Times praised China for its “tactful” release of an updated “unreliable entities list” to counter America’s “provocative” blacklisting of Chinese platforms like TikTok and WeChat. In reality, the Chinese list is widely seen as a temper-tantrum retaliatory measure with vague rules that will allow the CCP to ban any American or European entities it decides to put pressure on.

“The vagueness of the language would be disconcerting on its own, but that it comes at a time in which European companies in China are already worried about being next on the chopping block of an increasingly politicised business environment makes it all the more distressing,” European Chamber of Commerce President Joerg Wuttkey told CNBC on Monday.

Another Global Times editorial grumbled that the ByteDance-Oracle-Walmart deal is still “unfair” to the Chinese company and was imposed “forcefully without international law or general business rules as the basis,” but added that it is “relatively more reasonable to ByteDance” and shows the company’s “moves to defend its legitimate rights have to some extent worked.”

“The Chinese government’s latest restrictions on technology exports, including AI algorithms, have significantly influenced the outcome,” the Global Times asserted.

“A certain flexibility has been shaped in the contrast between the original demands made by Trump and the current deal,” the editorial continued. “It reflects that there is space for the game with the US, despite the fact that the decision-making approach in the US side is overbearing.”

“Chinese companies should study the TikTok case. In future conflicts, they could seek levers of interest that may affect the decision of the US based on their own circumstances, in an attempt to reduce the losses of Chinese companies,” the Global Times advised.

According to the Wall Street Journal on Monday, the TikTok deal may yet collapse due to a “squabble” between ByteDance and Oracle over how much ownership and control of the platform ByteDance would retain.

Bloomberg News noted that U.S. national security officials remain skeptical the deal would address their security concerns about TikTok, Trump said on Monday he will not approve the deal if ByteDance retains control of the platform, and, after a weekend of triumphant editorials praising the deal and insisting the CCP has no control over ByteDance, Global Times editor-in-chief Hu Xijin thinks Beijing could scuttle the deal because it “would endanger China’s national security, interests, and dignity.”

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