China stays conspicuously quiet after Trump’s TikTok deal declaration

In the wake of U.S. President Donald Trump's endorsement of a deal aimed at preserving TikTok's presence in the United States, China has notably refrained from commenting on the matter. This silence is significant, given that the ultimate decision regarding the app may still lie with Beijing. While Chinese state media has chosen to stay quiet, discussions on social media platforms have been minimal. However, one state-affiliated Weibo account highlighted a perspective from a Fudan University professor, who labeled the agreement a "win-win" for both nations. During the announcement of the executive order related to the deal, Trump claimed to have received approval from Chinese President Xi Jinping. Notably absent from the signing ceremony were representatives from ByteDance, TikTok’s parent company, and both ByteDance and the Chinese Embassy in Singapore have not responded to inquiries from CNBC. Reports from Chinese media, specifically LastPost, have suggested that TikTok's U.S. operations would be separated into two distinct entities. The newly proposed joint venture would manage TikTok's U.S. business, data handling, and algorithms, while ByteDance would retain a minority stake of less than 20%. This arrangement is intended to comply with U.S. national security laws that mandate ByteDance's divestment from TikTok's American operations to avoid a potential ban. Additionally, ByteDance is expected to establish a new U.S. company focused on e-commerce and brand advertising, as well as managing TikTok’s international relations. The future of TikTok in the United States remains precarious, with bipartisan concerns regarding potential access to sensitive user data by the Chinese government. A recent Pew Research survey revealed that the proportion of adult Americans who regularly obtain news from TikTok has surged to 20%, compared to just 3% in 2020. Earlier this year, the Supreme Court upheld a law stipulating that TikTok must be divested from ByteDance, with the initial deadline set for January. Trump has since extended this deadline several times in pursuit of an agreement. Trump previously indicated that Xi had given the green light for a TikTok proposal following a lengthy discussion with the Chinese leader. However, a summary of that conversation from Beijing offered a slightly different tone, wherein Xi expressed a desire for negotiations to adhere to market rules while respecting the interests of both parties. As negotiations concerning TikTok continue, they exist within the larger context of ongoing trade discussions between the U.S. and China. Experts have noted that China may have little motivation to permit a divestiture by ByteDance. Moreover, any potential deal could encounter legal hurdles in the U.S., particularly if it clashes with the divestiture requirements established by the Supreme Court. James Sullivan from JP Morgan shared insights on CNBC's "Squawk Box Asia," highlighting that the proposed TikTok agreement lacks clear direction regarding control over the algorithm, which could leave national security issues unresolved.