TikTok File Photo: VCG

A spokesperson of the Chinese Ministry of Foreign Affairs reiterated on Friday that China's position on the TikTok issue remains clear and consistent.

Spokesperson Guo Jiakun made the remarks in response to a foreign journalist's question at a regular press conference on whether China has approved a joint venture agreement regarding TikTok and the ministry's comments on the matter as Reuters and other foreign media reported, on December 18 local time, TikTok CEO Shou Zi Chew issued an internal letter updating the progress of TikTok's US operations.  

The letter claimed that ByteDance and TikTok have signed agreements with three investors and will establish a new US TikTok joint venture called TikTok USDS Joint Venture LLC.

According to Reuters, TikTok's Chinese owner ByteDance signed binding agreements to form a joint venture that will hand control of operations of TikTok's US app to American and global investors.

TikTok CEO Shou Zi Chew told employees the joint venture would "operate as an independent entity with authority over US data protection, algorithm security, content moderation and software assurance," according to a memo seen by Reuters.

According to a report by the Financial Times, new investors will take half of the joint venture, with Oracle, Silver Lake and MGX set to each gain a 15 percent stake. Existing ByteDance investors will take 30.1 percent of the entity and ByteDance will own 19.9 percent, the most allowed under US law, said the report, suggesting ByteDance remaining the largest shareholder in the joint venture.

Also, in the memo, the TikTok chief said ByteDance's US entities would continue running its main moneymaking business lines in the country including "ecommerce, advertising and marketing," according to the report.

Moreover, "the underlying algorithm will still be owned by Beijing-based ByteDance, with the blessing of American auditors," according to another report by US media outlet NPR, citing an internal TikTok memo reviewed by NPR and two sources familiar with the deal who were not authorized to speak publicly.

"The White House is sidestepping the law to bless a structure that leaves TikTok's core technology in China," the Financial Times reported, citing Jim Secreto, a former US Treasury official involved in overseeing TikTok during the Biden administration. "What was announced looks more like a franchise arrangement than a true divestiture."

TikTok has not responded to Global Times' inquiries as of press time.

Market speculations regarding TikTok have been lingering for a while, and at present, this reported update has not been officially announced by the company, so there is still uncertainty, Li Yong, executive council member at the China Society for WTO Studies, told Global Times on Friday.

If the reports are true, the move should be made in compliance with relevant Chinese laws and regulations, with respect for the company's free will and in consideration of the company's legitimate interests, as only by doing so would it ultimately be beneficial for all parties involved, including US users, Li said.

Previously, in response to a question about reports that US President Donald Trump signed an executive order enabling TikTok's continued operations in the US and Vice President JD Vance said the company had been valued at $14 billion, Guo Jiakun, a spokesperson for the Foreign Ministry, said at a regular press on September 26, that following the China-US talks on economic and trade issues in Madrid, competent authorities have shared information on the basic framework consensus on the TikTok issue, which can be consulted.

Guo reiterated that China's position on the TikTok issue is clear. The Chinese government respects the wishes of the company in question, and would be happy to see productive commercial negotiations in keeping with market rules lead to a solution that complies with China's laws and regulations and takes into account the interests of both sides. The US side needs to provide an open, fair and non-discriminatory environment for Chinese investors.

On September 14 and 15 local time, Chinese and US delegations held talks in Madrid, Spain, where the two sides reached a basic framework consensus on resolving issues related to TikTok through cooperation, reducing investment barriers and promoting relevant economic and trade cooperation, according to China's Ministry of Commerce (MOFCOM) following China-US trade talks in Madrid.

In responding to media inquiries for further details on the progress made in China-US talks regarding TikTok issue, a MOFCOM spokesperson on September 20 highlighted that the country welcomes companies to conduct business negotiations in line with market rules to reach solutions that comply with Chinese laws and regulations and balance interests of all parties.

"We hope the US side will work with China in the same direction, faithfully fulfill its corresponding commitments, and provide an open, fair, equitable, and non-discriminatory business environment for the continued operation of Chinese companies, including TikTok, in the US, thereby promoting stable, healthy, and sustainable development of China-US economic and trade relations," the spokesperson said.  

"This reported update should only be a preliminary framework. Whether it can be effectively implemented in practice, and how any new issues that arise during operation will be addressed, remains to be seen," Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Friday. However, if the measure can both respond to the concerns of regulators in both countries and create conditions for the sustainable operation of businesses, thereby preserving the existing commercial ecosystem, it would represent a relatively ideal outcome for all parties, Zhou said.