China signals it is open to a deal keeping TikTok in US

Donald Trump said he wanted U.S. and Chinese interests to split control of TikTok 50-50. Photo: Shannon Stapleton/Reuters
Donald Trump said he wanted U.S. and Chinese interests to split control of TikTok 50-50. Photo: Shannon Stapleton/Reuters

Summary

The founder of the app’s parent, Beijing-based ByteDance, met with Elon Musk last year.

SINGAPORE—China suggested it was willing to work with Donald Trump to keep TikTok operating in the U.S.

The Chinese Foreign Ministry said Monday that companies can make their own decisions on operations and acquisitions, a reversal of the government’s previous position that it would block any forced sale of TikTok. It was the ministry’s first comment after Trump said Sunday, a day before his inauguration, that he wanted U.S. and Chinese interests to split control of the app 50-50.

TikTok’s founder, Zhang Yiming, has one connection that could help smooth the way for dealmaking: Elon Musk.

Zhang, China’s richest person, and Musk, a Trump confidant and the world’s richest person, spoke last year after it became apparent that Congress would pass a law to ban TikTok in the U.S., according to people familiar with the matter.

The law passed in April 2024 and went into effect Sunday following a Supreme Court ruling that it was constitutional. After a frenetic weekend when TikTok went dark for about 14 hours in the U.S., the app resumed operations, and the company credited assurances by Trump.

Zhang has a 21% equity stake in TikTok’s Beijing-based parent, ByteDance, and majority control over the company through extra voting rights. In a reminder of the Chinese government’s influence, Foreign Ministry spokeswoman Mao Ning said any deal should comply with Chinese regulations.

Musk has repeatedly argued against banning TikTok and has generally positive relations with Chinese officials. Tesla, Musk’s electric-vehicle company, has a major presence in China.

Chinese officials have internally discussed allowing Americans they trust such as Musk to invest in TikTok’s U.S. operations. It couldn’t be determined whether Beijing directly discussed this idea with either Musk or ByteDance leadership. Musk met Chinese Vice President Han Zheng, who is attending Trump’s inauguration, over the weekend.

ByteDance has tried to avoid leaving an impression that it is following Beijing’s lead when determining TikTok’s future. Zhang has deliberately distanced himself from Chinese officials, people close to him said. The ByteDance founder, who no longer holds an executive position at the company, isn’t a member of China’s ruling Communist Party.

Kevin Zhou, founder of Chinese tech-news outlet Pandaily, said he initially introduced Zhang to Musk in 2014, before TikTok was created. Zhou said he accompanied the then-little-known entrepreneur on a visit to Tesla’s California office.

According to the journalist, Zhang compared Musk to Apple founder Steve Jobs but said Musk was bolder and had greater vision. “He is my hero," Zhou recalled Zhang saying.

Zhang and Musk lost touch over the next decade, so Zhou said he reconnected the pair last year after Musk said in March that he opposed banning TikTok. Zhou said Musk had forgotten that he had previously met the TikTok founder.

Write to Raffaele Huang at raffaele.huang@wsj.com and Stu Woo at Stu.Woo@wsj.com

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