China Institutes New Tech Restrictions, Complicating TikTok Sale – Bloomberg

  • Lauren
  • August 30, 2020
  • Comments Off on China Institutes New Tech Restrictions, Complicating TikTok Sale – Bloomberg

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Supply Lines is a daily newsletter that tracks Covid-19’s impact on trade. Sign up here, and subscribe to our Covid-19 podcast for the latest news and analysis on the pandemic.China imposed new restrictions on the export of artificial intelligence technologies, signaling it may step in to block Beijing-based ByteDance Ltd. from selling the U.S. operations of its TikTok short-video app.AI interface technologies such as speech and text recognition, and those that analyze data to make personalized content recommendations, were added to a revised list of export-control products published on the Ministry of Commerce’s website late Friday. Government permits will be required for overseas transfers to “safeguard national economic security,” it said.

The new restrictions could cover the technologies ByteDance uses in TikTok, the official Xinhua News Agency reported, citing a trade expert. That suggests Beijing would require the company to seek regulatory approval in China before it sells any related assets, likely delaying and possibly undermining any transaction.

President Donald Trump’s administration has said the Chinese company must sell the U.S. operations of its popular video-sharing app because of alleged national security risks. Microsoft Corp. and Oracle Corp. have submitted rival bids to ByteDance to acquire TikTok’s U.S. business, while Centricus Asset Management Ltd. and Triller Inc. made a last-minute pitch on Friday to buy TikTok’s operations in several countries for $20 billion, according to a person familiar with the matter.ByteDance should study the new export list and “seriously and cautiously” consider whether it should halt negotiations, Xinhua cited Cui Fan, the trade expert who is a professor at Beijing’s University of International Business and Economics, as saying.

The revised rules would cover cross-border transfers of restricted technologies even within the same company, while the impact and consequences of failing to make appropriate applications would be very different if an international business is spun off, Cui said separately in an interview with Bloomberg.Centricus’ 11th-Hour Bid Adds Intrigue to TikTok Waiting GameTechnologies related to drones and to some genetic engineering methods and procedures were also added to the revised export-control list while others in areas like medical equipment were removed. The revisions are meant to promote China’s technological advancement and international cooperation, and “safeguard national economic security,” a commerce ministry representative said in a separate statement on Friday.

Sign up for Next China, a weekly email on where the nation stands now and where it’s going next.Technology exports encompass various transfers out of China including via trade, investment and patents, according to the statement. Any export of restricted technology will require letters of export permit intentions from Chinese authorities before negotiations can be held, while final permits are required before any transfer happens.— With assistance by Sharon Chen, Dingmin Zhang, and Miao Han

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Source: https://www.bloomberg.com/news/articles/2020-08-30/china-curbs-exports-of-some-artificial-intelligence-technologies