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China’s export restrictions pose a new risk to TikTok’s sales in the US



The inclusion of new technologies in China’s list of export restrictions could, according to state media reports, hinder TikTok’s sales in the US, according to the latest reports on trade tensions between the two countries.

At the end of Friday, the Chinese Ministry of Commerce revealed the government added items, including those related to computer technology and artificial intelligence, to the list of technologies that are subject to export controls.

In an interview with the state intelligence agency Xinhua, Cui Fan, a government adviser, suggested that the new measures could affect the sale of TikTok byteDance, its Chinese owner, as they cover some of its core technologies.

He added that the company, which had attracted interest from Microsoft, Oracle and Walmart in its operations in the US, Canada, Australia and New Zealand, should “seriously and cautiously”

; decide whether to suspend its negotiations as a result.

Trade restrictions are the latest development in a dispute between China and the United States over TikTok, a popular video application that President Donald Trump has promised to end unless its business in the country is sold to a US company.

China has not revised its list of technology export restrictions since 2008, the trade ministry said in a statement. The changes were necessary due to the “rapid development” of science and technology in the country.

The updated list of controlled exports added restrictions for “personalized information recommendation services based on data analysis”. Tiktok is built on algorithms that analyze user behavior to create customized content.
The Ministry of Trade stated that it approves or rejects export applications within 30 working days of receiving the application.

Prof. Cui, who is also a professor at Beijing University of International Trade and Economics, told FT that changes have been under discussion since 2018. However, China is now partially implementing them due to the “current international situation”.

Inclusion in the list means that companies must obtain additional government permits to export certain technologies. Prof. Cui told Xinhua that ByteDance should go through “licensing procedures” if it exports related technologies.

Video: Why TikTok and WeChat are a new front line in the US-China technological war

TikTok’s control is seeing a wider deterioration in China-US relations. Long-standing trade tensions are escalating this year following the outbreak of the coronavirus and the introduction of a new security law in Hong Kong, which has led to US sanctions against individuals.

Recent US pressure has focused on the technology sector. Mr Trump, who tightened his stance on China ahead of the November US election, said there was “credible evidence” that ByteDance’s actions could jeopardize US security.

In early August, Mr Trump said he was giving US companies 45 days to stop trading with WeChat, a Chinese messaging application owned by Tencent. The US president has indicated that he may take a similar approach to other Chinese companies, including the Alibaba e-commerce group.

In China, ByteDance faced resistance to the impression that it had succumbed to American pressure.

Last week, Kevin Mayer, CEO of TikTok, resigned and pointed to a “significantly changed” political environment. Earlier this week, the company sued Trump’s report.

ByteDance did not respond immediately to a request for comment.


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