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China hits out at US push to ban TikTok as former treasury secretary Steven Mnuchin plots bid

Beijing urges Washington to ‘stop unfairly suppressing foreign companies’

Steven Mnuchin: Beijing has hit out at US legislation to ban TikTok as the former treasury secretary says he has assembling a consortium to buy the app from its Chinese owner. Photograph: Patrick Semansky/AP

Eleanor Olcott
Thu Mar 14 2024 - 17:05

Beijing has hit out at US legislation to ban TikTok as former treasury secretary Steven Mnuchin said he was assembling a consortium to buy the app from its Chinese owner.

Foreign ministry spokesperson Wang Wenbin said on Thursday that the US had shown a “robber’s logic” towards the app, which has 170 million users in America. “When you see other people’s good things, you must find ways to own them,” Wang said.

The US House of Representatives on Wednesday approved a bill that would force TikTok owner ByteDance to sell the app to a non-Chinese company within six months or be banned from US app stores. It still needs senate approval and president Joe Biden’s signature.

Mr Mnuchin said in an interview with CNBC on Thursday that he was putting together an investor group to attempt to take over the short-video app. “It’s a great business,” he 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.”

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US security officials have said the app poses a risk to national security. China has long banned the most popular western social media platforms, including Facebook, Instagram and X, as it tightened censorship.

However, any sale would require China’s approval under export control rules that in effect give it a veto in any deal that would sell Chinese technology to a US buyer. Beijing’s commerce ministry said last year it would “firmly oppose” a forced sale by ByteDance.

[ Why is TikTok facing a ban in the US? ]

He Yadong, spokesperson for the commerce ministry, on Thursday called on Washington to “stop unfairly suppressing foreign companies”.

TikTok has spent more than $1.5 billion (€1.4bn) on so-called Project Texas, a corporate restructuring plan to safeguard US user data and content from Chinese influence. TikTok has partnered with US cloud software group Oracle to build a stand-alone unit to wall off American user data.

The debate over banning TikTok has become one of the only unifying topics that Democrats and Republicans can agree on in Congress as concerns mount about Chinese interference in sectors including education, construction and entertainment. Mr Biden supports a ban but former president Donald Trump is opposed to it.

The House vote came after US security and intelligence officials held classified briefings for politicians to outline the alleged national security risks.

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ByteDance had engaged in an intense lobbying campaign to oppose the measure, saying it would harm small businesses that rely on its app to reach new customers.

TikTok generates the bulk of its revenue from advertising but it has taken its ecommerce platform to various markets across Asia as well as the US, enabling brands and merchants to sell goods marketed through short videos.

TikTok Shop debuted in the US in September, generating since then $1.1 billion in gross merchandise revenue, the total value of goods sold on its platform, according to internal TikTok financial statistics seen by the Financial Times. ByteDance was valued at $260 billion last year, and TikTok accounts for most of the parent group’s business, giving it a huge price tag in any potential acquisition.

Meta-owned Instagram has emerged as TikTok’s fiercest rival in the US after its introduction of “reels”, a feature that allowed users to share short clips, cloning the TikTok’s viral video features. Last year Instagram overtook TikTok as the most downloaded app in the world. – Copyright The Financial Times Limited 2024

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