The battle over TikTok’s ownership has become a defining clash in the U.S.-China tech cold war. In 2020, former U.S. President Donald Trump threatened to ban TikTok unless its Chinese parent company, ByteDance, sold its U.S. operations to an American firm, citing national security risks. This demand ignited a firestorm of debate over data privacy, corporate sovereignty, and the escalating rivalry between the world’s two largest economies. The Chinese government’s response—a mix of regulatory maneuvering, legal pushback, and geopolitical posturing—reveals Beijing’s determination to protect its tech giants while challenging U.S. dominance in global digital governance. This article dissects China’s calculated reaction to Trump’s TikTok proposal, explores the implications for international tech policy, and unpacks the broader struggle for control over the digital frontier.
The Trump Ultimatum: A Recap
In August 2020, President Trump issued Executive Order 13942, declaring TikTok a national security threat due to its Chinese ownership. The order alleged that ByteDance could share U.S. user data with the Chinese Communist Party (CCP), a claim both ByteDance and Beijing vehemently denied. Trump demanded that ByteDance divest TikTok’s U.S. operations within 90 days or face a ban. Microsoft, Oracle, and Walmart emerged as potential buyers, with Oracle eventually securing a tentative “technology partnership” to manage TikTok’s U.S. data.
The move was part of Trump’s broader campaign against Chinese tech firms, including Huawei and ZTE, which he framed as extensions of Beijing’s surveillance apparatus. However, TikTok’s massive U.S. user base—over 100 million at the time—made it a uniquely high-stakes target.
China’s Immediate Response: Legal and Regulatory Countermeasures
Beijing reacted swiftly, framing Trump’s order as an abuse of power and a violation of free-market principles. Key actions included:
- Updated Export Control Rules (August 2020)
China’s Ministry of Commerce revised its export control regulations to include “recommendation algorithms” like TikTok’s For You Page (FYP) as restricted technologies. This gave Beijing veto power over any sale involving TikTok’s core intellectual property (IP). Analysts interpreted this as a direct response to pressure ByteDance to abandon forced divestment. - State Media Condemnation
Outlets like Global Times and Xinhua accused the U.S. of “bullying” and “theft,” arguing that Washington sought to “plunder Chinese tech achievements.” Editorials framed the TikTok saga as evidence of America’s declining commitment to fair competition. - ByteDance’s Legal Challenge
With tacit support from Beijing, ByteDance sued the Trump administration, calling the ban “politically motivated” and lacking evidence. Courts temporarily blocked the ban, citing free speech concerns.
The Core of China’s Argument: Digital Sovereignty
Beijing’s resistance to Trump’s TikTok demands was rooted in its doctrine of “cyber sovereignty,” which asserts that nations have the right to govern their digital ecosystems without foreign interference. Key themes in China’s stance included:
- Rejection of “National Security” Justification: Chinese officials dismissed U.S. data privacy concerns as hypocritical, pointing to the Cambridge Analytica scandal and NSA surveillance leaks. Foreign Ministry spokesperson Wang Wenbin stated, “The U.S. is in no position to lecture others on data security.”
- Protection of Chinese Innovation: Beijing framed ByteDance as a homegrown success story, arguing that forcing a sale would set a dangerous precedent for other Chinese tech firms. State media warned that acquiescing to U.S. demands would “sacrifice China’s hard-won technological progress.”
- Countering U.S. Hegemony: China’s response aligned with its broader strategy to reduce reliance on Western tech and promote alternatives like the Digital Silk Road. By defending TikTok, Beijing aimed to rally global support against what it called “U.S. digital imperialism.”
The CFIUS Factor and Forced Divestment
The Committee on Foreign Investment in the United States (CFIUS), which reviews cross-border deals for national security risks, played a pivotal role. In 2019, CFIUS began investigating ByteDance’s 2017 acquisition of Musical.ly (later merged into TikTok), citing insufficient data safeguards. CFIUS’s pressure for divestment set the stage for Trump’s executive order.
China retaliated by tightening its own foreign investment rules. In January 2021, Beijing introduced measures requiring government approval for tech exports, further complicating any TikTok sale. This mirrored U.S. restrictions on Chinese acquisitions of American tech firms, highlighting a tit-for-tat regulatory escalation.
The Oracle-Walmart Deal: A Compromise or a Charade?
By September 2020, ByteDance proposed a deal where Oracle and Walmart would take minority stakes in a new U.S.-based entity, TikTok Global, which would handle American user data. Oracle claimed it would have “full security control,” but ByteDance insisted it would retain an 80% ownership stake.
China’s government cautiously endorsed the arrangement, but state-linked commentators warned that ByteDance should not “surrender core algorithms.” The deal ultimately stalled due to unresolved regulatory disputes and Biden’s election, which shifted the administration’s priorities.
Biden’s Approach and Ongoing Tensions
President Biden revoked Trump’s TikTok ban in June 2021 but ordered a broader review of foreign-owned apps. Meanwhile, China continued fortifying its tech defenses:
- Enacting the Data Security Law (2021) and Personal Information Protection Law (2021), which restrict cross-border data transfers.
- Accelerating development of homegrown tech (e.g., semiconductor manufacturing) to reduce U.S. dependency.
TikTok remains operational in the U.S. but faces growing scrutiny. In March 2023, the Biden administration demanded ByteDance sell its U.S. stake or risk a ban—a move Beijing called “unreasonable suppression.”
Global Implications: A New Playbook for Tech Wars
The TikTok standoff has reshaped international tech governance in three ways:
- Data Localization: Nations like India and the EU have followed the U.S. in pushing for data storage within their borders.
- Tech Decoupling: The U.S. and China are incentivizing domestic production of critical technologies, fragmenting the global digital economy.
- Regulatory Arms Race: Countries are adopting stricter export controls and investment screening, complicating cross-border mergers.
China’s Long Game: Beyond TikTok
Beijing views the TikTok conflict as part of a larger struggle for technological supremacy. By defending ByteDance, China aims to chinese government responds to donald trump’s proposal for tiktok ownership:
- Assert its role as a global tech rulemaker.
- Shield its companies from foreign coercion.
- Promote alternatives to U.S.-dominated platforms (e.g., WeChat, Douyin).
However, the strategy carries risks. Aggressive resistance could further isolate Chinese firms from international markets, while U.S. restrictions may hinder access to cutting-edge innovations.
Conclusion: TikTok as a Microcosm of U.S.-China Rivalry
The Chinese government’s response to Trump’s TikTok ultimatum underscores its resolve to protect digital sovereignty while challenging Western tech hegemony. For Beijing, TikTok is not just an app but a symbol of China’s rise as a tech superpower—one that refuses to bow to foreign pressure. As the U.S. and China continue sparring over AI, semiconductors, and data governance, the TikTok saga offers a blueprint for future conflicts: a mix of legal battles, regulatory barriers, and ideological warfare.
In this new era of “techno-nationalism,” the rules of global business are being rewritten. Companies like TikTok now find themselves at the mercy of geopolitical winds, caught between two giants unwilling to cede an inch in the race for digital dominance.
