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State-backed newspaper outlet Global Times have stated that Beijing is not likely to approve the deal between ByteDance, Oracle and Walmart.
Barely days after the approval of the ByteDance deal with the duo of Oracle Corporation (NYSE: ORCL) and Walmart Inc (NYSE: WMT), a publication from the Chinese based newspaper The Global Times have stated in an editorial that Beijing is unlikely to approve an ‘unfair’ deal between the tech giants. Per the editorial, the deal whose details were supplied by the United States government is unfair, and that it caters to the unreasonable demands of Washington, which casts doubts on the likelihood of Beijing assenting to such deals.
Earlier, Coinspeaker reported that Beijing released a new set of regulations which implied that it will have to approve any deal between Chinese indigenous companies aiming at partnering with a foreign entity. While this position complicates the ByteDance acquisition deal in the US owing to the economic tension between China and the US, the perceived unfair deal ByteDance struck with Oracle (ORCL) has been described as another means by Washington to exert its bullying tendency.
The editorial noted:
“It is clear that these articles extensively show Washington’s bullying style and hooligan logic. They hurt China’s national security, interests, and dignity. ByteDance is an ordinary company in China. The US suppresses it with all its national strength and forces it to sign a deal under coercion. China, also a major country, will not yield to US intimidation and will not accept an unequal treaty that targets Chinese companies”.
ByteDance ORCL Deal: Where the Fault Lies
The original excuse for attempting to place a ban on ByteDance’s operations for operating TikTok in the US is based on national security concerns, and while these concerns are not completely alleviated, ByteDance is set to restructure in a way that TikTok Global will emerge with sizeable American ownership.
While ByteDance will still have the majority ownership in the TikTok Global business, Oracle will take up 12% ownership while Walmart (WMT), the e-commerce giant will take a 7.5% ownership while serving as the firm’s commercial partner. According to the Global Times, the US President, Donald Trump has noted that the new company would have “nothing to do” with China and would be fully controlled by the US, a position that seems to underestimate “China’s determination to defend its basic rights and dignity.”
In making a further case to why Beijing may likely toss out the deal, the publication stated:
“The US is a big market. If the reorganization of TikTok under US manipulation becomes a model, it means once any successful Chinese company expands its business to the US and becomes competitive, it will be targeted by the US and turned into a US-controlled company via trickery and coercion, which eventually serves only US interests.”
With the ongoing clampdown of Chinese based tech companies including Tencent’s WeChat, Huawei and others, the Global Times noted that if Beijing does not fight back, “the US will enjoy global technological hegemony forever.”