Picture: BLOOMBERG/YAN CONG
Picture: BLOOMBERG/YAN CONG

Hong Kong/Beijing — China has emphasised its right to approve or block the sale of technology abroad, confirming on Thursday that it will play a critical role in the sale of TikTok’s US operations to suitors that include Microsoft  and Oracle.

Beijing’s assertion jeopardises negotiations over the sale of ByteDance’s prized international asset, a complex deal already under scrutiny by US President Donald Trump’s administration. The Chinese government added several artificial intelligence features to a list of export-restricted technologies, effectively gaining the right to block a deal by targeting features such as the recommendation algorithms essential to the viral video service.

The regulatory changes aren’t targeted at specific companies, Gao Feng, spokesperson for the Chinese ministry of commerce, stressed during a weekly online briefing. But companies should consult with the relevant government agencies should any technology they employ fall under the list.

“If related enterprises are transferring technology abroad during trade, investment or technical co-operation that fall under the regulations, they are advised to immediately consult provincial-level commerce department offices and handle it in accordance with the law,” he said.

Beijing’s last-minute entry and its opaque deal-approval process increase the likelihood a sale could get held up and Trump will then move ahead with a TikTok ban ahead of November’s election. It’s likely the need for approval from two geopolitical rivals will push any final deal beyond the November vote in the US, a person familiar with the matter has said.

ByteDance founder Zhang Yiming is now said to be reconsidering his options and may well seize on Beijing’s last-minute involvement to tie up a deal. For China, the move helps it gain leverage to prevent what state-run media called the “theft” of technology while underscoring to the US it has intellectual property worth protecting.

Bloomberg

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.