Trump-backed TikTok deal receives tacit approval from Xi, as long as compromises are made in other areas.
In the ongoing saga of TikTok's future in the United States, both countries are engaged in intense negotiations. The Chinese Foreign Ministry has urged the US to refrain from imposing unilateral trade restrictions and to provide an open, fair, and non-discriminatory environment for Chinese investors.
The latest developments in these negotiations have been portrayed as mutually beneficial by China's ruling Communist Party's official mouthpiece, the People's Daily. However, it appears that a deal to spin off TikTok's US operations has not yet been finalized, despite claims made by Donald Trump.
The key sticking point in the negotiations is the fate of TikTok's AI-driven recommendation algorithm, a prized asset that has helped the app attract 170 million Americans and over 1.5 billion users worldwide. China aims to retain ownership of this critical component, a position that has been echoed by Trey McArver, co-founder of research firm Trivium China.
Beijing has proposed methods such as entrusting the operation of TikTok's US data and content security services, as well as licensing its algorithms and intellectual property rights. China's Cyberspace Administration Deputy Director, Wang Jingtao, has suggested these measures as potential solutions.
The company that owns TikTok, ByteDance, is a Chinese internet company. The "basic framework consensus" agreed by both sides also covers reducing investment barriers and advancing relevant economic and trade cooperation.
The US law on TikTok explicitly precludes any cooperation concerning the operation of a content recommendation algorithm. This poses a significant challenge in reaching a resolution.
The two leaders, Trump and Xi, last spoke by phone in June and agreed that Xi would come to the United States "at the appropriate time." Trump has announced that he will meet Xi at the APEC summit in South Korea next month, and that he will visit China early next year.
China's top leader has signaled his blessing for the plan, but only if it aligns with Beijing's interests. This flexibility in dealing with the mercurial Trump and the fluctuating state of bilateral ties has been noted by Yun Sun, director of the China Program at the Stimson Center think tank.
Meanwhile, China will review the export of TikTok's tech and intellectual property licensing needed to complete the deal. Economics professor Cui Fan in Beijing and advisor to the Chinese Commerce Ministry has noted that TikTok's technologies are restricted rather than banned for export.
Some analysts, like Brian Wong, an assistant professor at the University of Hong Kong, suggest that China may be using TikTok as a bargaining chip to secure concessions such as the US easing semiconductor export controls, investment restrictions, and potentially tariffs on China.
As the negotiations continue, it remains to be seen how the US and China will resolve this contentious issue and what implications it may have for future bilateral relations.
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