The Chinese government has taken a board seat and partial ownership in a key subsidiary of TikTok maker ByteDance, part of the nation’s broader crackdown on big tech companies.
A Chinese government entity now controls a board seat and 1 percent stake in Beijing ByteDance Technology, an entity that oversees Douyin — the Chinese version of TikTok — as well as a news aggregator with hundreds of millions of users called Toutiao, according to Reuters.
The entity with Chinese government investment is reportedly separate from ByteDance proper, which controls TikTok, is based in the Cayman Islands.
“The Chinese subsidiary referenced only relates to some of ByteDance’s China-market video and information platforms, and holds some of the licenses they require to operate under local law,” a ByteDance spokesperson told The Post in reference to the investment, which filings show was first made on April 30.
Potential Chinese government involvement in TikTok has been a tense issue since the Trump administration. The former president sought to ban TikTok last year due to security concerns through a set of executive orders that were blocked by the courts and later withdrawn by the Biden administration this June.
The move is also part of a broader domestic crackdown on China’s homegrown tech companies.
A government entity also took a similar 1 percent stake in the parent company of Twitter-like app Weibo. And Chinese authorities recently scuttled ride-sharing app Didi’s plans to go public in the US.
“I think this all arises out of a concern within the Chinese government that private technology companies were gaining too much data and too much power, and so should be construed as a move by the Chinese government to rein them in and take control,” Paul Haswell, a Hong Kong-based partner at law firm Pinsent Masons, told Reuters.
“This practice is likely to continue, with the government taking greater stakes and exerting more control, essentially turning many of these tech companies into SOE (state enterprise)-lite type entities,” he said, adding that the government’s actions could make it difficult for Chinese firms to do business overseas.
With Post wires
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