Will ‘strictly abide’ by new China export rules: ByteDance

TikTok owner ByteDance has said it will abide by the new rules set by China for technologies that are subject to export bans or restrictions.

China updated the list of technologies that are subject to export bans last week amid pressure on the app’s parent company ByteDance by the White House to divest its business in the US quickly or face an effective ban.

The new list, released jointly by China’s Ministry of Commerce and the Ministry of Science and Technology, added 23 items to export restrictions while technical parameters of 21 items were revised.

On Sunday, ByteDance said “the company will strictly abide” by the new export rules, reports CNBC.

All technology transfers abroad, whether through trade, investment or other means, must strictly abide by relevant regulations on technology import and export of the country, the Chinese Ministry of Commerce said in a statement on Friday.

The update could affect a potential TikTok deal in the US.

“As a fast-growing innovative enterprise, ByteDance has many cutting-edge technologies in artificial intelligence and other fields, and some technologies may have been covered by the adjusted catalogue,” Professor Cui Fan at the University of International Business and Economics told Xinhua.

Two new items under the category of information processing technology in the computer service industry were cited by Cui as relevant in the TikTok deal, which was the “personalized information push service technology based on data analysis” and “artificial intelligence interactive interface technology.”

The rapid development of ByteDance’s international businesses has been built on the strong technical support based in China, Cui said, noting that the company’s act of offering core algorithm services to overseas branches constitutes a typical export of technical services.

“For the international business to continue to operate smoothly, no matter who its new owner and operator are, it is highly likely that there will need to be a transfer of software codes or right of use from inside China to outside China,” Cui said.

“Technical services provision from inside China to outside China may also be needed.”

Several US companies including Microsoft and Oracle are now in the fray to buy TikTok’s US operations.

While retail giant Walmart joined Microsoft in the bid, social media company Triller also reportedly approached ByteDance directly with a $20 billion bid via London-based global investment firm Centricus.

“It is suggested that ByteDance carefully study the revised catalogue, seriously and carefully consider whether it is necessary to suspend substantive negotiations on relevant transactions, comply with statutory application and reporting procedures, and then take further actions as appropriate,” Cui said.

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