China Using TikTok To Push Back Against 'America First,' Analyst Says

TikTok's prospective buyers are trying to determine ways to structure the acquisition from parent company ByteDance that includes buying the company's U.S. operations without key software and its prize algorithms.

Negotiations were stalled late last week after the Chinese government announced new technology export-restrictions that expand from computing and data-processing technologies such as text analysis and content recommendation to voice modeling and voice recognition.

"I would not do the deal without the algorithms that have proven to work very well," said Francis Bassolino, managing partner at Alaris in Shanghai, China.

Bassolino doesn't think the deal makes that much sense for Walmart, especially if executives think TikTok will help to move product. "I suspect that Microsoft [alone] is best positioned to win because other suitors would run afoul of Congress' newfound zeal to break up big tech," he said. 

He believes China's strategy is partly theatrics and partly a sincere effort to counter a change in dynamics that is having a detrimental impact on Chinese companies.

"The theatrics depict China as the defender of law and order -- the stalwart leader protecting international legal norms," he said. "This is pushback against 'America first' and a ploy to get the Europeans to support China's efforts to counter nationalization of international assets in the U.S. The sincere effort is to support the development and protection of technologies that are truly innovative."

It's easy to argue as to whether or not the algorithms are Chinese intellectual capital, but it is clear that the government must do something to protect their firms from the new dynamics, he said.

"The U.S. now is willing to take the gloves off and street fight as well or better than China does," Bassolino said. "China needs to do something to counter America's willingness and indeed propensity to play by a new set of rules."

Next story loading loading..