Following U.S. President Donald Trump’s approval of a deal that could keep TikTok alive in the U.S. on Thursday, China has remained conspicuously quiet — a notable silence as Beijing still can ultimately decide the app’s fate.
Chinese state media remained silent about the deal, while social media discussion was limited. One state-affiliated Weibo account cited a Fudan University professor, who described the agreement as a “win-win” for both countries.
During the signing of an executive order on the deal, Trump said that he had “gotten the go ahead” from Chinese President Xi Jinping.
No representatives from ByteDance were present at the signing, and ByteDance and the Chinese Embassy in Singapore did not respond to CNBC’s requests for comments.
Meanwhile, certain details of the deal remain unclear. On Friday, Chinese media outlet LastPost reported that TikTok U.S.’s operations would be divided into two companies, citing unnamed sources.
A new joint-venture company, which was laid out in Trump’s executive order on Thursday, would oversee TikTok’s U.S. business, data and algorithm, with its China-based owner ByteDance retaining a less than 20% stake.
According to the order, this would satisfy the requirements of a U.S. national security law requiring ByteDance to divest from TikTok’s U.S. operations or face an effective ban in the country.
ByteDance will also set up a new U.S. company responsible for e-commerce, brand advertising and managing ties with TikTok’s international operations, LastPost reported, citing anonymous sources.
The fate of TikTok in the U.S. has long hung in the balance, with lawmakers from both major political parties warning that Beijing could gain access to sensitive data or use TikTok to influence public opinion.
A fifth of adult Americans now regularly get news on TikTok, up from just 3% in 2020, according to a Pew Research survey released on Friday.
Earlier this year, the Supreme Court upheld a law to ban the app unless ByteDance divests from it. The initial deadline was in January, but Trump, through executive orders, has extended the deadline multiple times as he sought a deal.
Trump first said that Xi had approved of a TikTok proposal earlier this month following a nearly two-hour call with the Chinese leader. However, a readout of the call from Beijing seemed to tell a slightly different story.
Xi was quoted as saying his government would “be happy to see productive commercial negotiations in keeping with market rules lead to a solution that complies with China’s laws and regulations and takes into account the interests of both sides.”
Xi also asked the U.S. to “refrain from imposing unilateral trade restrictions” and to “provide an open, fair and non-discriminatory environment for Chinese investors.”
The latest TikTok negotiations come amid broader trade talks between Washington and the U.S., with expectations that the platform could be used as a negotiating point.
However, some experts have recently told CNBC that China has very little incentive to allow a ByteDance divestment.
A potential deal could also face legal challenges in the U.S. if it conflicts with the divestiture terms for ByteDance set out in the TikTok sale-or-ban law upheld by the Supreme Court in January.
Speaking on CNBC’s “Squawk Box Asia” on Friday, James Sullivan of JP Morgan said Trump’s proposed TikTok deal lacked clarity on who is in control of the algorithm, leaving the national security concerns wide open.
