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- Washington claims the popular social networking service poses a national security threat
BEIJING: Beijing on Monday accused the Trump administration of abusing “national power” by trying to ban TikTok, as a federal court gave the video app’s US operations a stay of execution.
A US government order had sought to ban new downloads of the Chinese-owned app — but allow use of TikTok until Nov. 12, when all use would be blocked.
President Donald Trump claims the popular app poses a national security threat and harvests data for Beijing via its Chinese parent company ByteDance — allegations the firm vehemently denies.
Describing the order as “bullying behavior,” Chinese Foreign Ministry spokesman Wang Wenbin said it was evidence of “abusing national power to unreasonably suppress other countries’ enterprises.”
Instead, the US should “provide a fair, just, open, and nondiscriminatory business environment for companies around the world investing and operating in the country,” Wang added.
China says Trump is strong-arming the company into giving up full ownership of a lucrative app — with 100 million US subscribers — to an American rival.
But late on Sunday a US federal court issued a temporary block on the order after TikTok’s lawyers successfully argued it was a “punitive” ban motivated by politics rather than genuine security fears.
Details of the injunction remain sealed for now by the court in Washington.
The US squeeze on TikTok is one of a litany of issues souring relations between the rival powers, spanning tech, defense, human rights and contested seas.
US tech giants have also raised concerns over the precedent a ban could set for a free Internet — and the prospect of reprisals against American firms operating in China’s vast market.
ByteDance has begun discussing a complex transfer of ownership to Silicon Valley giant Oracle.
A tentative deal unveiled last weekend would make Oracle the technology partner for TikTok and a stakeholder in a new entity to be known as TikTok Global.
TikTok said Sunday it would “maintain our ongoing dialogue with the government” on the plan, which has received preliminary approval from Trump.
But it was still unclear whether the deal would be approved by Beijing, where some consider the US move an unjustified appropriation of Chinese technology.
Separately, Shares in China’s biggest chipmaker tumbled Monday on reports that the US had imposed export controls on the company, the latest salvo in the countries’ battle for technological dominance.
In a new blow for China’s advanced tech ambitions, the US Commerce Department reportedly ordered companies to seek permission before selling equipment to Semiconductor Manufacturing International Corp. (SMIC).
Equipment sold to the Chinese company posed an “unacceptable risk” of being diverted to “military end use,” according to a letter sent to major US computer chip firms that was seen by The Wall Street Journal and the Financial Times.
News of the letter, which was first reported Saturday, sent SMIC’s shares plunging in both Shanghai and Hong Kong on Monday, closing down seven and 3.9 percent respectively.
SMIC is China’s biggest contract manufacturer of chipsets and a key pillar of Beijing’s plans to achieve semiconductor self-reliance.
Analysts say China’s dependence on foreign — including US-made — chips hinders that national goal.
Backed by several state-owned entities, SMIC has made strides at improving China’s chip capabilities but it remains heavily reliant on imported equipment and software.
Under the new rules announced by the Commerce Department, US companies that want to sell equipment to SMIC will have to apply for a license.
“The restriction, once implemented, will severely damage SMIC’s existing and future manufacturing capabilities, and customer trust,” Bernstein analysts led by Mark Li wrote in a note.
“Without steady supply and service from the US, the yield and quality of SMIC’s capacity will degrade, as early as in a few months for more advanced nodes.”
SMIC said Monday it had yet to receive any notification of the new restrictions from the Commerce Department.