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ByteDance to comply with China’s latest tech export rules, complicating TikTok sale

Written by Wency Chen Published on 

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The sale of TikTok’s US operations might need approval from Chinese authorities in order to proceed.

Tiktok-owner ByteDance said on Sunday in a Toutiao post that it will “strictly comply” with China’s new tech export restrictions, which now include “personalized content-recommend technology based on data analysis,” complicating a sale of TikTok in the US.

“We are aware of the adjustments to the catalog of prohibited and restricted technology export items, co-issued by the Ministry of Science and Technology and the Ministry of Commerce,” reads the statement. ByteDance promised to handle business related to technology export according to the rules, which means the sale of TikTok’s US operations might need approval from Chinese authorities in order to proceed.

On Friday, the ministries updated the list of technologies that are prohibited and restricted for export, which ranges from the agriculture, chemistry, and pharmaceutical industry, to internet and software that is deemed sensitive. The newly-added ones include voice synthesis technology, artificial intelligence interaction, audio recognition, and content recommendation, among others.

ByteDance’s short-video app Douyin and its overseas version TikTok gained popularity globally, underpinned by its precise AI-driven recommendation engine that lures users to stick with the app.

On Saturday, state-owned news agency Xinhua published a commentary, quoting Cui Fan, a professor at the University of International Business and Economics, singling out the case of ByteDance.

“If ByteDance plans to export relevant technology, it should fulfill the permission application procedure,” said Cui. He added that no matter who will be the new owner of ByteDance’s international business, there will be cross-border transfer of code and other technology services.

“Therefore, I recommend ByteDance to seriously study the adjusted catalog and reconsider cautiously whether or not to suspend relevant deals and negotiation,” he concluded.

ByteDance has been in talks with several American companies, including Microsoft, retailer Walmart, and Oracle, about a sale of TikTok’s US operations, after President Trump threatened to ban the app. The company has since sued the US government.

ByteDance is not the only company that has been dragged into the tussle between the world’s largest economies. Gaming giant and WeChat-owner Tencent, telecom and electronics powerhouse Huawei, as well as AI startups like Megvii and SenseTime are also affected. The tightened control on tech exporters, as a response to recent restrictions US regulators imposed on Chinese companies, is escalating the situation just a little more.

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