China lashed out at a proposed US ban on TikTok, with a foreign ministry spokesperson accusing Washington of employing “robber’s logic” towards the popular app.
“When you see other people’s good things, you must find ways to own them,” Wang Wenbin said, highlighting TikTok’s 170 million American users.
The US House recently passed a bill demanding TikTok owner ByteDance sell the app to a US company within six months or face a ban. The legislation still needs Senate approval and President Biden’s signature.
Meanwhile, former Treasury Secretary Steven Mnuchin sees an opportunity. He revealed on CNBC that he’s assembling an investor group to acquire the short-form video platform. “It’s a great business,” Mnuchin said. “It should be owned by a US business. There’s no way the Chinese would ever let a US company run something like this in China.”
US security officials have expressed concerns about the app posing a national security risk. Notably, China heavily restricts access to Western social media platforms like Facebook, Instagram, and X within its borders.
However, any potential sale faces a significant hurdle: China’s export control rules. These regulations essentially grant China veto power over deals involving the sale of Chinese technology to US buyers. Beijing’s commerce ministry previously declared it would “firmly oppose” a forced sale of ByteDance.
He Yadong, a commerce ministry spokesperson, urged Washington to “stop unfairly suppressing foreign companies.”
TikTok has invested heavily (over $1.5 billion) in “Project Texas,” a plan to keep US user data and content separate from Chinese influence. This initiative involves partnering with US cloud software company Oracle to establish a standalone unit for American user data.
The potential TikTok ban has become a rare point of bipartisan agreement in Congress. Both Democrats and Republicans share concerns about Chinese influence in various sectors, including education, construction, and entertainment. While President Biden supports the ban, his predecessor, Donald Trump, opposes it.
Beyond Entertainment: The Rise of TikTok Ecommerce
While advertising forms the core of TikTok’s revenue stream, the platform has also been making a name for itself in the world of e-commerce across Asia and the US. Brands and merchants leverage short video marketing to sell their products through TikTok Shop.
Launched in the US just last September, TikTok Shop has already generated a significant $1.1 billion in gross merchandise revenue, according to internal financial data obtained by the Financial Times.
In the US market, Meta-owned Instagram is rapidly becoming TikTok’s biggest competitor. Instagram introduced “Reels,” a feature allowing users to share short clips, effectively copying TikTok’s viral video format. Last year, Instagram surpassed TikTok as the most downloaded app globally.
