The Chinese Communist Party has a new enemy- Chinese businessmen and start-ups. With the TikTok facing a tricky choice in the US, that is, either get banned or get sold, ByteDance has moved towards a deal with the American tech giant, Microsoft Corp. But the CCP is not happy- it has unleased the 50 Cent Army against TikTok on the Chinese social media, while other Chinese start-ups promise to stand up with ByteDance.
ByteDance is not backing down. It has already lost the biggest user base in India, and now it doesn’t want to lose a prolific market in the United States. ByteDance remains firm on staying within the US even if it means selling its American operations to Microsoft and giving the US government its cut in the deal.
A TikTok-Microsoft is a win-win deal for everyone except China. ByteDance gets a fair pay-out from Microsoft. Microsoft itself gets to challenge the Internet Ad goliaths like Google and Facebook by entering one of the largest social media spaces in the world via TikTok. And the Trump administration gets a cut in the deal. But it is China which loses an internet giant in the US.
The CCP is irked with the US getting to profiteer at the expense of a Chinese tech giant. Hu Xijin, Editor-in Chief of CCP mouthpiece Global Times tweeted, “This is an open robbery. The world is watching and God is watching that how President Trump is turning the once great America into a rogue country.”
This is an open robbery. The world is watching and God is watching that how President Trump is turning the once great America into a rogue country. pic.twitter.com/FaL3MkwsYe
— Hu Xijin 胡锡进 (@HuXijin_GT) August 4, 2020
The CCP is directing criticism at the US through the state-run media. The state-owned daily Chinese newspaper, Chinese Daily has labelled a Microsoft-TikTok deal as a “theft” of a Chinese tech company by the US. The CCP wants TikTok to desist from selling itself to Microsoft Corp. China Daily even stated, “TikTok must defend its rights legally.”
However, ByteDance has defied the CCP diktats. It remains insistent on getting a good payout from Microsoft and thus maintaining a presence in the US. ByteDance says that it will “remain committed to our vision to become a globalized company”, notwithstanding the challenges that it is facing.
On Monday, ByteDance Founder and CEO Zhang Yiming addressed a letter to his employees which read, “We faced the real possibility of a forced sale of TikTok’s US business by CFIUS (Committee on Foreign Investment in the United States) or an executive order banning on the TikTok app in the US.”
Yiming also told his staff that the company “initiated preliminary discussions with a tech company to help clear the way for us to continue offering the TikTok app in the US.” The US General Manager of TikTok, Vanessa Pappas has also made it clear that the app is “not planning on going anywhere.”
Zhang also understands that in the present geopolitical circumstances, he doesn’t really have a choice. Therefore, he said, “We disagree with CFIUS’s conclusion because we have always been committed to user safety, platform neutrality, and transparency. However, we understand their decision in the current macro environment.”
Zhang’s refusal to go by the CCP diktats has led to an online fury in China directly targeting the ByteDance Founder-CEO. The CCP has unleashed its 50 Cent Army consisting of hired internet commentators and bot accounts, all of them slandering Zhang for allowing the US to cause the sale of the Chinese app’s US operations.
The dominant narrative being built in Chinese social media apps like Weibo tends to label the ByteDance founder as a traitor or an American agent. One such CCP troll said, “Zhang Yiming used to praise the US for allowing debate, unlike in China, where opinions are one-sided. Now he got a slap in the face, why doesn’t he go argue with the US?”
Zhang is being labelled a “public intellectual”- the term is apparently derogated in China, as CCP’s keyboard warriors believe that “public intellectuals” are ignorant and pro-West.
But there could be more setbacks in the offing for the Chinese Communist Party. Chinese start-ups and investors are more or less sympathetic with ByteDance. They seem to understand that a deal with Microsoft is the only way out for Zhang Yiming.
William Bao Bean, General Partner at Chinaccelerator, a cross-border accelerator, said, “They (ByteDance) are stuck between a rock and a hard place.” He added, “We are in a fast-changing regulatory environment. I think the consumers would probably want to continue using the service, and this is one potential way to make that happen. Obviously, I don’t think it’s what ByteDance really wants.”
Others like AppInChina’s CEO, Rich Bishop seems to be even more comfortable with a Microsoft-TikTok deal. He said, “I think it’s a good outcome for all sides. Microsoft of course benefits hugely from getting into social media. ByteDance gets a good payout, and Bytedance and the Chinese government are relatively friendly towards Microsoft.”
The CCP owes its hegemony largely to its hold and control over the Chinese corporate giants. But the way ByteDance is going in the US, it really seems that the CCP is now losing control over Chinese businessmen. It is for the first time that Chinese companies are standing up to CCP’s bullying. As such, this could be one of the biggest blows to the CCP till date. And with countries like India and the US continuing their onslaught against Chinese tech companies, we might witness even more fissures between the CCP and Chinese corporate majors.