China is calling a TikTok deal a win. What's in it for them?
10 hours ago Share Save Suranjana Tewari Asia Business Correspondent and Osmond Chia Business reporter Share Save
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A much-awaited deal over TikTok may be close, with US President Donald Trump and his Chinese counterpart Xi Jinping set to discuss terms on Friday. Top officials from both sides struck a "framework" agreement this week, which reports suggest could see TikTok's US operations sold to a group of American firms. If the deal goes through, it would be what one expert called a "rare breakthrough" in US-China trade negotiations - and one which settles an issue that has made headlines for years. Experts have been telling the BBC what a final deal might look like for TikTok's 170 million US users, and what Beijing might get in return.
The US may not get the 'secret sauce'
Chinese state media is calling it a "win-win" for both countries, while Trump has said "I'd like to do it for the kids". But a lot about "it" still remains unclear. Reports suggest that American users would be offered a new US-specific version of the app. And that the US operations could be bought by a consortium that includes technology giant Oracle, and investment firms Andreessen Horowitz and Silver Lake. The BBC has contacted the companies for comment. But what exactly is on the table? At the heart of the tussle is TikTok's algorithm - the "secret sauce" that recommends content to users based on their preferences and behaviours. It's key because it drives the app's virality and appeal. Other companies have tried to re-create the algorithm - Instagram has Reels, YouTube has Shorts - but they are not as good, a former social media executive who worked for Snap and Viber told the BBC, speaking on the condition of anonymity. "Generally, the one who introduces the technology just knows how to do it better."
Reuters US Treasury Secretary Scott Bessent speaking to media earlier this week
TikTok's Chinese owner, Bytedance, understandably refused to part with the prized formula, and Beijing backed the firm. But in a twist few saw coming, China's top cybersecurity regulator has signalled that Beijing may allow ByteDance to license the algorithm and other intellectual property (IP) to a US company owner. But it will not be transferred outright. It's a major departure from China's previous hardline stance over the algorithm. But there's every chance the US version will run on a "stripped-down" version of the app's software, said computing expert Kokil Jaidka from the National University of Singapore. Even limited access could reveal how the technology drives engagement, moderation and ad targeting - all the things that make the app so profitable, she adds. "It simply doesn't make business sense for ByteDance to hand over its most valuable asset when a lighter version can keep the app running without giving away its edge." But these changes will affect the user experience - the app may show less diverse content than users might see elsewhere, Dr Jaidka adds. "A lighter, slower, more domestic version - while ByteDance keeps the crown jewels in Beijing."
The deal could still be a while away
The user experience will remain the same, and with "Chinese characteristics", according to US Treasury Secretary Scott Bessent, who is leading his side's negotiating team. The "Chinese characteristics" may well be the problem though - that is, in fact, a phrase often used by the Chinese Communist Party to differentiate its way of doing things. US officials, including Trump during his first term, have long raised concerns about who has access to TikTok's data, and the influence the app has over US users. These questions over national security spurred legislation that former president Joe Biden signed into law last year, requiring TikTok to hand over control of its US operations or face a ban. Trump has since changed his mind, crediting TikTok for boosting young voter support in his 2024 election win. But a sale must still satisfy US lawmakers and allay the worries that kickstarted everything. Congress is likely to need to approve any agreement, and there is already political backlash in Washington on both sides of the aisle. Republican lawmaker John Moolenaar has said he is concerned that the agreed framework could still allow Chinese government influence and control. "Put simply: the statute requires full separation from 'foreign adversary' control, and a license would not appear to meet that test," lawyer Hdeel Abdelhady told the BBC.
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