Beijing is not at all happy with how the TikTok-Oracle deal panned out!
In an editorial, Global Times, the official newspaper of Communist Party ruling China reported that there currently exists a huge bone of contention about how the entire deal is going to be structured.
In order to put the security concerns of the Trump Administration to rest, TikTok cracked a deal with Oracle and Walmart. Both the U.S tech majors will acquire 20% of the TikTok Global – a new U.S based company which will own the US operations of TikTok and comprise mainly of Americans as the board of directors.
However, ByteDance, on the other hand, wants TikTok Global to be their U.S subsidiary and own 80% ownership – something that is creating a lot of confusion about the total deal structuring though.
Highlighting this debacle, the tabloid mentioned that Washington is nothing but a mere bully with misplaced logic and wants to hurt the national security, interests and dignity of China.
It went on to play judge and said the terms of the deal were absolutely unfair and that these ‘unreasonable demands’ from Washington are very likely to not be approved by Beijing.
ByteDance has reported that the deal with Oracle and Walmart will only move ahead when all the required approvals have been taken from both Beijing and Washington.
This is no easy feat, especially in the light of revised tech export rules that China has introduced just last month and now gives China regulatory oversight over the TikTok deal.
Major Objections: Bone Of Contention
If you thought the rollercoaster of a ride of TikTok’s acquisition was coming to an end then you’re wrong. Even though ByteDance, Oracle and Walmart did reach an agreement which would somewhat pacify the concerns of the current U.S administration, both the sides have framed the deal in a way which favours themselves.
According to ByteDace, it will be owning the majority stake, 80% to be precise, in TikTok Global whereas according to Oracle and Walmart ByteDance’s ownership will get distributed to its investors – many of whom are Americans.
Besides this, Oracle and Walmart have also asked for 4 out of TikTok Global’s 5 member board to be American which again is something that the Global Times viewed as ‘bullying’.
The editorial also said that the U.S, through the kind of deal they have proposed, can easily have an upper hand on ByteDance as they will get to know about the operations of Douyin given the same source code is used in TikTok.
The unidentified author further wrote that if Beijing ends up giving its approval to Washinton then manipulation might become a concrete model for the U.S. He also raised a point that the TikTok Oracle deal approval by Beijing will have a far-reaching impact as it will allow America to turn every other successful Chinese company that enters the U.S into a U.S controlled company.
Note here that these comments and arguments are not those of the Chinese government directly but reflect on how China might react to the situation.
There hasn’t exactly been any direct form of comments about the TikTok deal from China’s government even though their foreign ministry has repeatedly and quite aggressively campaigned for a fair and ‘non-discriminatory’ deal from the United States.
Currently, ByteDance has 2 Chinese nationals on their 5 member board with the other three individuals being foreigners who run U.S based companies.
Now, it remains to be seen what does the future hold for the deal’s approval.
Do you think that the ByteDance would be able to convince China exactly the way Oracle got the blessings of Donald Trump without buying a majority share in TikTok? Do let us know your views in the comment section below.