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What China's new export rules could mean for TikTok sale in US

Suban Abdulla
·3-min read
It's the latest development in the Sino-US feud between the nations over TikTok.
It's the latest development in the Sino-US feud between the nations over TikTok. Photo: Sheldon Cooper/SOPA Images/LightRocket via Getty

New Chinese restrictions could hinder TikTok’s pending US sale, according to state media reports.

A revised catalogue of technologies that are subject to export bans could mean the US has to seek Beijing’s approval for a sale by Bytedance.

On Friday, China’s Ministry of Commerce and the Ministry of Science and Technology announced it had added a host of new items including new technologies, and those related to computing and artificial intelligence to its exports list.

The trade restrictions mean that all technology transfers from China to overseas, whether through trade, investment or other means, must abide by the country’s imports and exports regulations.

Chinese ministers are also working to streamline the catalogue of technologies subject to import bans or restrictions.

According to Chinese trade expert, Cui Fan, the new rules could impact TikTok’s sale by ByteDance — its Chinese owner — as the measures cover some of its underlying technologies.

READ MORE: TikTok to challenge Trump administration over ban

One measure that might affect TikTok is the restriction of “personalised information recommendation services on data analysis,” with TikTok’s app being built on algorithms that analyse personal behaviour to promote personalised content.

ByteDance, which has been in talks with tech giant Microsoft (MSFT) has also attracted interest from Oracle (ORCL), Walmart (WMT) and Twitter (TWTR), for its US operations, which also include Canada, Australia and New Zealand.

Fan, who is also a professor at Beijing’s University of International Business and Economics, advised ByteDance to “seriously study” the updated catalogue to decide whether it should suspend its negotiations.

It is the latest development in the Sino-US feud between the nations over the controversial video-sharing app that US president Donald Trump seeks to ban unless the Chinese-owned app finds a US owner.

The fixation on TikTok follows the ongoing trade war Trump started with China since being elected, which saw long-standing geopolitical and trade tensions heat up, particularly after the coronavirus pandemic, with Trump blaming the country for the virus.

Trump has also condemned China over a new security law that was introduced in Hong Kong, which saw the US slap sanctions on chief Carrie Lam.

READ MORE: Microsoft reveals talks to buy TikTok US, Canada, Australia and New Zealand

In its first revision since 2008, a total of 23 new items subject to export trade restrictions were added to the list.

Meanwhile, five items were deleted off the exports list, including information security firewall software technology and the technical parameters of 21 items were also revised.

The commerce ministry said it aims to approve or deny applications for export within 30 business days.

ByteDance has been given until 12 November, to divest TikTok’s US operations amid security concerns over how the app handles Americans’ personal data or face a ban.

In retaliation, TikTok has brought a legal suit to challenge the Trump administration over the the 90-day order.