China Refuses to Accept 'Theft' of TikTok if US Acquisition Goes Ahead

Yesterday we reported on Microsoft's accelerated efforts to purchase TikTok in the United States before President Trump follows through on a threat to ban the Chinese-owned app in the country.

On Tuesday, Reuters reported that China's ruling Communist Party blasted those efforts via an editorial in the China Daily newspaper, saying it will not accept the "theft" of a Chinese tech company and is ready to respond if needed.

The United States' "bullying" of Chinese tech companies was a consequence of Washington's zero-sum vision of "American first" and left China no choice but "submission or mortal combat in the tech realm," the state-backed paper said in an editorial.

China had "plenty of ways to respond if the administration carries out its planned smash and grab," it added.

There is increasing concern among observers that Apple would become the likely focus of any countermeasures by China. Apple journalist John Gruber notes that with Google and Facebook already banned in China, Apple would be the obvious tit-for-tat target.

The Global Times, which is another Chinese government mouthpiece, reported in May that China could put Apple on an "unreliable entity list" alongside other U.S. companies, in a series of punitive countermeasures the country was prepared to take against U.S. moves to block Taiwan-based TSMC from selling chips to Huawei for its phones.

According to comments made last year by a Chinese ministry of commerce official, once a company is added to China's "unreliable entity list" it would face necessary legal and administrative measures and the Chinese public would also be warned against dealing with it to reduce risks.

In its latest editorial, however, The Global Times took a less threatening tone and said that U.S. treatment of ByteDance and Huawei was indicative of U.S. efforts to separate its economy from China's.

The paper said China had "limited ability" to give the Chinese companies protection by retaliating against U.S. companies because the United States had technological superiority and influence with its allies. Instead, it suggested that China's opening-up to the outside world and ending its strategy of decoupling with the U.S. should be priorities.

On Monday evening, President Trump reiterated that TikTok must sell off its U.S. operations in 45 days and that the deal must include a substantial payment to the U.S. government, otherwise the app would be banned.

"I don't mind whether it's Microsoft or someone else, a big company, a secure company, a very American company buys it," said Trump, according to Bloomberg.

"It'll close down on 15 September unless Microsoft or somebody else is able to buy it and work out a deal, an appropriate deal, so the Treasury of the United States gets a lot of money," he added.

Trump stopped short of explaining how the federal government had the authority to demand a cut of a transaction between two companies neither of which it has a stake in. It also remains unclear how a ban of TikTok would be enforced.

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