Chinese officials are reportedly exploring a backup plan for TikTok after the Supreme Court appeared unlikely to save it from a US ban. With TikTok’s legal options nearly exhausted, many media outlets are reporting that China is considering an option it previously said it would not: allow ByteDance to sell the app.
Kick? China is reportedly considering President-elect Donald Trump’s favorite tech billionaire Elon Musk to act as either a broker or buyer in the deal. Reports from Financial Times, Wall Street Journal AND Bloomberg – all citing unnamed sources – indicate that Chinese officials are at least discussing the option of a sale. TikTok spokesman Michael Hughes called the reports “pure fiction”. The Chinese embassy in the US and Musk’s existing social media company, X, did not respond to requests for comment.
Many people have expressed interest in buying TikTok at this point, from Shark Tank celebrity Kevin O’Leary to YouTuber Mr. Beast. The problem has not been a lack of buyers – although notables like Meta and Google are likely to be banned by anti-rust authorities – but reluctant sellers. New reporting suggests the Chinese government, which has long said it would refuse to approve a sale, may now change its mind. Musk’s reported involvement makes strategic sense based on his relationship with China and Trump.
Musk is uniquely positioned to play a role in a potential deal. He has a direct line to Trump, has said he wants X to be more like TikTok since he bought it, and plenty of experience dealing with Chinese authorities. (Sales from China make up a significant portion of Tesla’s business.) It could merge TikTok with X and xAI, its OpenAI competitor, to create a more impactful platform. As the richest man in the world, he also has access to the money he needs to make a deal.
Long Le, a professor of international business at Santa Clara University, says threshold that China may be open to a joint venture arrangement, similar to what foreign companies operating in China are often subjected to. According to the text of US law, an application can be considered to be controlled by a foreign opponent if a person from one of these countries owns at least 20 percent of the shares.
“If they were to do some kind of joint venture, Elon Musk would be ideal because he is also close to Trump,” Le says, adding that the Chinese government may already be comfortable with him. “Having someone like Musk would allow the US and China to have some aspect of the relationship with trade and foreign direct investment, even though, in general, the decoupling is happening.
“If they were to do some kind of joint adventure, Elon Musk would be ideal”
China could block a sale if it believes the US will allow TikTok to remain under ByteDance’s ownership, especially given TikTok’s influence around the world. ByteDance is a champion of homegrown technology and a source of national pride for China, so the government may not be willing to suffer the prospect of handing over TikTok to the US. Plus, China may prefer to let the US take the heat globally over the ban, even if it means losing an important market for TikTok. Chinese foreign ministry spokesman Wang Wenbin said last year that a forced sale or embargo “will inevitably come back to bite the United States.”
China, on the other hand, will face a new protectionist administration when Trump is sworn in next week. He has promised excessive tariffs on Chinese imports, which could hurt its economy. If the Chinese government is looking for an effective bargaining chip with Trump and the US, it may have found one in TikTok, especially given the President-elect’s “warm spot” for the app. Chinese officials see a deal on TikTok as a possible area of cooperation with the US as they anticipate tense negotiations on other issues with the Trump administration, the sources said. Bloomberg.
If TikTok is banned, it’s not clear how quickly users would feel the effects. Apple and Google will have to remove the app from their app stores and stop updating it. It will still remain on users’ phones if they’ve already downloaded it, but Oracle, which provides cloud infrastructure for TikTok in the US, will likely also be required to stop hosting the app’s data.
Some can still access TikTok using virtual private networks (VPNs), but this adds an extra layer of friction. Despite all this, progress towards a deal could continue after the ban comes into force on Sunday – which will happen unless the Supreme Court stops it. There is also the small possibility that Congress or President Joe Biden will extend the deadline.
