Beijing is signaling a green light to American investors’ takeover of TikTok’s operations in the United States, a rare opening in the grinding US-China tech standoff.
The breakthrough follows a September 19 call between US President Donald Trump and Chinese President Xi Jinping, during which the TikTok issue reportedly featured prominently.
The control of TikTok’s algorithm is being addressed through a workaround. Media reports said that, under the arrangement, ByteDance will lease its algorithm to the US-based TikTok entity. At the same time, Oracle Corp will retrain it and secure a US-specific version “from the ground up.”
US officials said the aim is to give American stakeholders full operational control over the recommendation engine, while ByteDance retains intellectual property rights.
“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,” Guo Jiakun, a spokesperson of the Chinese Foreign Ministry, said Monday.
“The US side needs to provide an open, fair and non-discriminatory environment for Chinese investors,” the spokesperson said.
Washington and Beijing reached a consensus on the sale of TikTok’s US businesses to American investors after US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng held six hours of trade-related talks in Spain on September 14. The meeting came after the US Commerce Department added 23 Chinese semiconductor firms to its “Entity List” on September 13.
A columnist using the pseudonym “Zhongsheng” (sound of bells) with the state-owned People’s Daily said in a commentary published on September 21 that “dialogue and consultation must be grounded in principles, and the atmosphere for cooperation requires joint effort to build and maintain.”
“China’s rights to development must not be compromised, and its determination to defend legitimate interests is unwavering. Any attempt to force China into making fundamental concessions through pressure is unrealistic,” he says. “The US should lift its unilateral trade restrictions to avoid derailing hard-won negotiation progress.”
He says that China and the US can achieve mutual success and shared prosperity, bringing benefits to both nations and the world. However, he adds, this can be reached only if both sides act with the responsibility of major powers, stay aligned in direction and work together.
Before the Bessent-He meeting, Zhongsheng said in an article published on September 14 that it should not always be the Chinese side to compromise.
“The US should move in step with China and create an open, fair and non‑discriminatory environment for Chinese firms investing in America,” he says. “China’s right to development cannot be undermined, and any attempt to force Beijing into concessions through pressure is unrealistic.”
After the meeting, Trump once again extended the deadline for ByteDance to divest from TikTok from September 17 to December 16. The deadline has been extended three times already, with Trump threatening to ban TikTok’s operations in the US.
Some observers see this development as Beijing’s second concession in three months after China agreed to resume rare earth shipments to the US in June.
‘China did not lose’
TikTok’s US business is the company’s crown jewel, drawing in 170 million monthly active users and 82.2 million daily users, according to industry data. Last year, TikTok’s US revenue hit $10 billion, underscoring its commercial weight alongside its cultural impact.
In the US, adult users spend an average of 52 minutes a day on the app—far more than on Instagram (35 minutes) or Facebook (30 minutes), while more than half of its weekly users are under 35.
US TikTok users by age, according to company data:
- 18–24: 25%
- 25–34: 30%
- 35–44: 19%
- 45–54: 13%
- 55+: 14%
Globally, TikTok has 1.12 billion monthly active users and a potential ad reach approaching 1.94 billion people, making it one of the world’s most powerful social media platforms.
In the first six months of 2025, the app was downloaded over 436 million times, cementing its position as a dominant force in the attention economy. The US market, however, remains its most strategic and politically sensitive arena.
According to reports on the structure of the pending deal, the US entity would be majority‑owned by American investors.
The White House said Americans will take six of seven seats on the board of TikTok’s US business, ensuring majority oversight. Oracle and other US firms are expected to play a central role in security and management. ByteDance would remain a minority shareholder, while continuing to provide technical support for the platform’s daily operations.
Some Chinese commentators acknowledged that the US will benefit from the acquisition, but insisted that does not mean China has lost in the negotiations.
“Some argue that China is at a disadvantage in this contest, but that conclusion does not necessarily hold,” a Henan-based columnist using the pen name of “Zebra” says.
“TikTok’s capital structure has long been ‘Americanized,’ while daily decisions remain under the ByteDance team. This setup was designed to avoid the stigma of a ‘Chinese capital threat’ and to prevent unnecessary bans.”
He says the fading of Chinese capital in TikTok’s US business is a proactive strategy to neutralize Washington’s national security narrative.
“While the US gains political and financial leverage from the deal, TikTok’s algorithm, the core of the app’s technological power and strategic value, remains firmly under Beijing’s purview,” he says. “TikTok’s competitive edge remains intact, and operational initiative continues to rest with the Chinese side, not with the shareholders.”
Tariffs remain key issue
Washington has pushed hard to close the TikTok deal, leveraging both trade and tech policy in the process. It remains unclear whether the US will have to loosen some of its chip export controls in exchange for Beijing’s cooperation.
When China agreed to resume shipments of rare earth metals to the US in June, the Trump administration, in return, approved Nvidia to ship its H20 chips to China. However, Beijing later warned that Nvidia’s products could be tracked, traced, or even shut down remotely in China.
A Fujian-based columnist noted that the TikTok negotiations in Madrid had once been close to collapse, but the US and China maintained the dialogue as their tariff disputes have not yet been resolved.
“When all people thought that the two sides would not make a deal over the TikTok issue, they were then surprised to know that the talks were not only about TikTok but also about tariffs, which are another big issue for both sides to discuss,” the writer says.
Without specifying which side raised the tariff issue and which side backed down, he says it’s a smart move to bundle the tariff and TikTok matters together in the negotiation. He says this move brought both sides together and forced them to calculate their overall gains and losses, rather than focusing on particular issues and escalating the situation.
On August 11, Trump signed an executive order extending the deadline for higher tariffs on China until November 10.
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Follow Jeff Pao on Twitter at @jeffpao3
