The Chinese government has invested in two of the nation’s most significant technology firms — ByteDance, the Chinese company that owns the global, and Weibo, China’s version of Twitter — in an intended move to bolster its sway over the nation’s flourishing technology sector. In April, ByteDance sold a 1% stake in its Chinese subsidiary, Beijing ByteDance Technology Co., to WangTouZhongWen (Beijing) Technology, a state-backed firm, according to the public government records and the corporate information platform Qichacha.
WangTouZhongWen is owned by three Chinese state entities, one of which is linked to a fund, the nation’s internet watchdog, according to government records and Qichacha data. The Information, a U.S. tech site, earlier reported that Bytedance had also given a to a Chinese government official as part of the deal. A ByteDance spokesperson declined to answer questions about the investment and board seat. But the subsidiary doesn’t own TikTok, which operates outside China. Instead, the subsidiary “relates to some of ByteDance’s China-market and holds some of the licenses they require to operate under local law.”
In China, massive technology firms such as Alibaba and Tencent provide services such as e-commerce, payments, gaming, and social media ubiquitous and used by hundreds of millions of Chinese people. The Chinese version of internet companies and introduced new draft rules to strengthen data security and prohibit companies from engaging in anti-competitive behavior after years of runaway growth in the industry.Douyin. ByteDance also owns the Chinese news app Toutiao. Beijing has recently been clamping down on its . It has launched investigations into some of the country’s largest
News of the Chinese investment renewed some national-security concerns around TikTok in the U.S., where the video app has millions of users and is particularly popular with. Last year, then-President sought to bar TikTok and other Chinese apps and services from U.S. . Earlier this year, they dropped Trump’s attempt to ban TikTok. Still, the has said it is reviewing the risks of Chinese apps. Officials are concerned about apps that or have connections to the Chinese military or intelligence — worries that may mirror Chinese officials across the Pacific.
A national-security review of TikTok by a government group called the Committee on Foreign Investment in the United States, or CFIUS is ongoing. CFIUS had set deadlines for TikTok to divest its U.S. operations, but such a sale never happened. On Tuesday, Sen. Marco Rubio of Florida called on the White House to block TikTok, citing news of the Beijing stake and the board seat. “The can no longer pretend that TikTok is not beholden to the Chinese Communist Party,” he said.
“Even before today, it was clear that TikTok represented a serious threat to personal privacy and U.S. national security. Beijing’s aggressiveness makes clear that the regime sees TikTok as an extension of the party-state, and the U.S. needs to treat it that way.” security threat.ministry spokesperson Zhao Lijian said Wednesday that Rubio’s comments “disregarded the facts and unremittingly made anti-China remarks” to pursue his political interests. U.S. user data in China, would not provide data on users to the Chinese government, and denied that it’s a
Weibo, meanwhile, which trades on the Nasdaq, said in U.S. securities filings that an entity called WangTouTongDa (Beijing) Technology Co., Ltd., which was affiliated with ZhongWangTou (Beijing) Technology Co., Ltd, in April 2020in China’s currency, the yuan, for a 1% stake of Weibo’s China subsidiary, Beijing Weimeng Technology Co., Ltd, or Weimeng. Those two companies are also state-backed firms, according to public government records. Weibo said the stakeholder had the right to appoint a director to Weimeng’s three-member board and veto rights over “certain matters related to a content decision” and financings. Weibo did not immediately respond to a request for comment. AP researcher Chen Si in Shanghai contributed to this .