Inside China Tech: Is that TikTok deal happening or not?

Hello, this is Melissa Zhu from SCMP’s tech desk in Hong Kong with your Saturday morning round-up of this week’s biggest stories about China tech: more complications surrounding the US TikTok deal, Huawei’s chip supply situation and advancements that could pave the way for safer organ transplants from pigs to humans. An unpopular agreement The deal between ByteDance, Oracle and Walmart over TikTok’s US operations – pending approval from both the Trump administration and Beijing authorities – has been complicated by confusion over the ownership structure of the new entity they plan to form, as Coco Feng and Tracy Qu report. Beijing-based ByteDance, which has been criticised in its home market for entering negotiations with American companies soon after US President Donald Trump ordered it to divest its operations in the US, emphasised on Monday that it will retain control over the new entity, TikTok Global. The Chinese entertainment giant said in a post on its news aggregator Jinri Toutiao that TikTok Global will be its wholly-owned subsidiary. ByteDance affirms control over TikTok Global after criticism in China ByteDance plans to list TikTok Global “to further enhance the corporate governance structure and transparency”, but even after a small pre-IPO funding round it will still own a controlling 80 per cent stake, it added. However, Oracle has said that its new TikTok venture will be entirely divested from ByteDance. “Upon creation of TikTok Global, Oracle/Walmart will make their investment and the TikTok Global shares will be distributed to their owners, Americans will be the majority and ByteDance will have no ownership in TikTok Global,” Oracle said in a statement to reporters late on Monday in the US. The US president said on Monday he would not approve a deal between Oracle and TikTok unless the US owners gain control over the popular Chinese-owned video-sharing app, in a reversal of his statement over the weekend that the deal had his “blessing”. “They [Oracle and Walmart] are going to have total control over it. They’re going to own the controlling interest. And if we find that they don’t have total control, then we’re not going to approve the deal,” Trump said. Meanwhile, China watchers have said Beijing is unlikely to approve a deal that looks like a loss of face for them and a home run for the US administration. State-owned media outlets have attacked the transaction in recent commentaries. China Daily called it “dirty and unfair” and said it was “based on bullying and extortion” on Wednesday, while People’s Daily wrote in an opinion piece on Tuesday that the goal of the forced sale was to seize control of an influential Chinese company. Read more about why both Trump and Beijing don’t like the ByteDance-Oracle deal: Trump and Beijing at loggerheads over ByteDance’s Oracle deal Chips down for Huawei Do they or don’t they (have enough chips)? That has been the question plaguing Huawei Technologies since it became the target of crippling US sanctions that have cut off its access to many core technologies, including semiconductors. The latest, a ban on companies providing Huawei with US-origin technology, came into effect on September 15. This cut off key chip suppliers such as Qualcomm and Taiwan Semiconductor Manufacturing Company (TSMC), which will need to apply for a licence from the US Commerce Department to continue supplying Huawei. After several statements from Huawei earlier saying it had been stockpiling supplies of chips, Richard Yu Chengdong, chief executive of Huawei’s consumer business group, acknowledged last month that US sanctions had been a “big loss”, and it may not be able to ship handsets with its high-end Kirin chips after this year as a result. Tech analysts were eyeing Huawei Connect 2020, the company’s annual event for the global ICT industry, for a clearer idea of the company’s future business plans amid the US onslaught. At the event in Shanghai, Huawei rotating chairman Guo Ping said on Wednesday that the Shenzhen-based company has enough chips for its communications equipment businesses but not for its smartphones. “Our stock of chips for our enterprises business is adequate, but the company is still looking for ways to address the chipset problems for smartphones as Huawei consumes hundreds of millions of smartphone chipsets every year,” Guo said. After three rounds of US sanctions, survival is a priority for the company, the rotating chairman added. “Huawei has very strong capabilities in chipset design and we are willing to help key suppliers to improve their capabilities in manufacturing equipment and materials. To help them is to help us.” Full story by Celia Chen and Che Pan: Huawei says it needs to find new chip supplies for its phones Gene-modified pigs Gene-editing technology is controversial for sure, but it is also one of the most promising potential solutions to a global shortage of donor organs for patients suffering from organ failure. A group of researchers led by scientists from Chinese biotech firm Qihan Bio may have made a breakthrough in this field by producing genetically modified pigs with cells that are more compatible with the human immune system, according to a study published Monday in the Nature Biomedical Engineering journal. Transplants from pigs have long been explored as a substitute for human organs, but the risks of rejection due to the biological incompatibility of pig organs with human bodies and of transmitting porcine viruses have limited the clinical applicability of such transplants. In the latest study led by Qihan Bio, researchers have managed to produce genetically modified pigs with enhanced immunological and blood-coagulation compatibility with humans. The viruses that could be harmful to humans have also been inactivated in these pigs, Coco Feng reports. This could pave the way for safe and effective organ transplants from animals to humans, according to the researchers. More about how this works: Genetically modified pigs could yield safer organs for human transplants