China’s new rules around tech exports could need Beijing approval in TikTok sale

China's new rules around tech exports could need Beijing approval in TikTok sale

A Chinese trade expert told state media, that China’s new rules around tech exports mean ByteDance’s sale of TikTok’s U.S. operations could need Beijing’s approval, a requirement that would complicate the forced and politically charged divestment.

President Donald Trump ordered ByteDance to dispossessed short video app TikTok – which is challenging the order – in the United States amid security concerns over the personal data it handles.

Oracle Corp (ORCL.N) and Microsoft Corp (MSFT.O) are among the suitors for the assets, which also includes TikTok’s Canada, Australia and New Zealand operations.

However, China late on Friday revised a list of technologies that are prohibited or restricted for export for the first time in 12 years and Cui Fan, a professor of international trade at the University of International Business and Economics in Beijing, said the changes would apply to TikTok.

Cui said, “If ByteDance plans to export related technologies, it should go through the licensing procedures,” in an interview with Xinhua published on Saturday.

TikTok’s secret weapon is believed to be its endorsement engine that keeps users glued to their screens. This engine, or algorithm, powers TikTok’s “For You” page, which encourage the next video to watch based on an analysis of your behaviour.

Cui noted that ByteDance’s foreign development had depended on its domestic technology that provided the core algorithm and said the company may need to transfer software codes or usage rights to the new owner of TikTok from China to overseas.

China’s foreign ministry has said that it objected the executive orders Trump has placed on TikTok and that Beijing will defend the legitimate rights and interests of Chinese businesses.