China prefers to see TikTok closed rather than forced sale

President Donald Trump said last Thursday that he did not plan to extend the deadline for ByteDance to sell the American branch of TikTok, as the process remains uncertain.

Trump has repeatedly stated that the deadline to sell the application is September 15, 2020Although that's not the date stipulated in one of the two executive orders his administration issued in August.

The first executive order, which prohibits US companies from transacting with the Chinese company or its subsidiaries, in addition to setting a September 20 deadline.

The second, which has a November 12 deadline, requires Bytedance to sell TikTok for national security reasons. Microsoft and Oracle are among the contenders for the US assets of TikTok. Operations in Canada, New Zealand and Australia are also part of the agreement.

On July 31, Trump said journalists for the first time that he planned to ban TikTok in the United States within 24 hours. But on August 3, after Microsoft revealed it was in talks to buy shares of TikTok, Trump said he would give ByteDance 45 days to sell to an American buyer.

Then on August 6, Trump issued an executive order which prohibits transactions with ByteDance and its affiliates within 45 days, on September 20.

ByteDance and potential buyers of TikTok must reach an agreement acceptable to the Committee on Foreign Investment in the United States, an inter-institutional group.

Trump Administration Doesn't Want ByteDance To Have Continued Interest In TikTok and expects a tech company to be the biggest investor in short video app.

China's Commerce Ministry joined the party on Aug. 28 with a revised technology export control list that experts say would allow it to monitor any TikTok transactions.

This means that Beijing's approval will likely be necessary as well, which many observers doubt will happen immediately. The rules say it can take up to 30 days to get preliminary approval to export the technology.

Last week, when asked what impact the rules might have on the TikTok deal, the Chinese Ministry of Commerce responded that the regulatory changes were not targeted at specific companies, but reaffirmed their right to enforce the rules.

However, Beijing opposes forced sale of TikTok operations in the United States by its Chinese owner ByteDance and would prefer to see the short video app shut down in the United States, three people with direct knowledge of the matter said on Friday.

Chinese officials believe that a forced sale would that ByteDance and China appear weak under pressure from Washington, said the sources, who spoke on condition of anonymity given the sensitivity of the situation.

When asked about Trump and TikTok on Friday, Chinese Foreign Ministry spokesman Zhao Lijian said at a regular press conference that the United States was abusing the concept of national security and urged him to stop at the act of 'oppressing foreign companies.

On the other hand, if the term is not extended, transactions with TikTok will be prohibited, although the exact nature of these transactions has not been specified. The decree could make advertising on the platform illegal, and TikTok has prepared advertisers for such a result.

However, it is unclear if certain transactions can be prohibited that would prevent users who have already downloaded TikTok from using it, although there is also the example of the prohibition in India, where TikTok has chosen to voluntarily close.

TikTok and ByteDance filed a lawsuit in Los Angeles federal court on Aug. 24 against Trump's decree, calling it a pretext to fuel anti-China rhetoric.

On August 14, the Trump administration issued another executive order requiring ByteDance to relinquish its interest in the video-sharing operations of the TikTok app in the United States within 90 days.

This suggests a deadline of November 12. The second decree does not say what could happen if ByteDance does not comply.

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