China’s sabre-rattling shows TikTok deal is in jeopardy 

Beijing is seeking to derail a deal for US companies Oracle and Walmart to buy 20pc of social media firm TikTok Global with increasingly hostile language, experts have warned.

Chinese state media denounced the tie-up with TikTok owner Bytedance as “dirty and unfair” on Wednesday, saying it was “an American trap.” State-backed English language publication China Daily said the deal was based on “bullying and extortion.” 

US President Donald Trump has claimed that Beijing-headquartered Bytedance’s technology could be used to spy on the West, and has previously threatened to ban it from America unless a deal is struck.

Meanwhile the Communist regime in China has restricted exports of tech expertise, delaying any deal.

Christopher Balding, a China expert at Fulbright University Vietnam, said: "I think there is a significant likelihood [the deal gets blocked in China].

"It seems like Beijing was setting up this exact situation weeks ago with their export controls. Now with China Daily’s comments, one has to think the probability of rejection by Beijing has increased significantly."

The comments came as Satya Nadella, boss of Microsoft — an early frontrunner to buy Tiktok — distanced himself from the US takeover. 

Mr Nadella told Cnet the deal was "not something I recognise and it’s definitely not the deal I bid on". While some had expected a full sale to a US tech company, over the weekend Oracle and Walmart agreed to take 20pc of a new US-based entity called TikTok Global.

ByteDance appeared to get most of what it wanted, including permission to keep the valuable artificial intelligence algorithms for its short-video app.

That seemed to appease both Donald Trump, who declared victory and called off a ban on TikTok, as well as Chinese media media. Hu Xijin, the editor-in-chief of Global Times, said the deal was “still unfair but it avoids the worst result.”

Since then, however, ByteDance has said that it would remain in control of TikTok Global, appearing to contradict Trump’s earlier comment.

The back and forth has stoked concerns the deal could still fall through. President Trump said he could still block the deal if the US found Oracle did not have control. 

Jeffrey Towson, of Peking University, said: “China updated their rules on exports to include algorithms.

“A sale would require government approval, which they may or may not give.”

A partial sale may not fall under those rules, but he added: "That doesn’t matter. This is a political situation. So I’m sure the Chinese government will be paying close attention.”

Some experts said an agreement could still be on the cards. Richard Clode, a technology investor at Janus Henderson, said beneath the “sabre rattling” China “might well ultimately go along with this".