TikTok’s plan to base its international headquarters in the United Kingdom has been questioned following Washington’s pressure on the future of the Chinese company in the United States.
ByteDance, owner of the video sharing app, has had talks with the government based on its headquarters in London.
But the United States is considering banning TikTok and could only allow it to continue operating if it separates from China and becomes an American company.
“We remain fully committed to investing in London,” said a ByteDance spokesman.
A spokesman for the Department of International Trade said: “ByteDance’s decision on the location of their global headquarters is a commercial decision for the company.”
Tension comes between the UK and China over the government’s recent decision to order the removal of Huawei’s 5G equipment from British mobile networks by 2027.
It is feared that it could trigger a tit-to-tat economic war between the two countries.
The Chinese ambassador to the UK, Liu Xiaoming, told the Andrew Marr Show: “We are still evaluating the consequences. This is a bad decision.”
Asked if China would punish UK companies operating in China, Liu said, “We don’t want to politicize the economy. It’s wrong.”
But he said: “It is wrong to discriminate against the UK [against a] Chinese company due to pressure from the United States. ”
The United States has already implemented a series of sanctions against China Huawei.
The Trump administration claims that the Chinese telecommunications company provides a gateway for the state to spy on and potentially attack countries that use its equipment.
Huawei strongly denies the claims.
George Magnus, an associate researcher at the University of Oxford’s China Center, said it was “difficult to predict” how the Chinese government would react to Huawei’s decision.
“But we expect British companies to be in the sights of all this,” he said.
China is an important market for British affairs.
Jaguar Land Rover, owned by India Tata Motors, sells its vehicles in China. Last month it borrowed £ 560 million from five Chinese banks after sales ran out due to the coronavirus.
China is also a major investor in the United Kingdom, particularly the nuclear industry. China General Nuclear Power Corporation has invested around £ 3.6 billion in the UK, including the Hinkley Point nuclear power project in Somerset.
Josh Hardie, Deputy Director General of the British Confederation of Industry, said: “Post-Covid, trade promotion will be an important aspect of our recovery, so we need to think carefully about a future relationship that balances the UK’s global competitiveness with interests. wider. “
“We don’t want to politicize the economy,” Chinese ambassador Liu Xiaoming told the BBC about the potential repercussions for China-based UK companies following the government’s turnaround on Huawei.
But given the way trade is used as a political weapon by both sides, it is impossible to see how this could not be the case.
China has taken shape in targeting companies as a proxy for countries with which it rows.
Take Australia, which has blocked Huawei from its national infrastructure since 2012.
China recently banned some of its beef business and set tariffs on barley, which is designed to target the country’s important agricultural sector.
On the other hand, China is sinking large sums of money into the UK’s major infrastructure, such as nuclear power plants.
Huawei alone is investing £ 1 billion in chip development in a new facility in Cambridge.
These projects are only part of the deep economic interdependence between the United Kingdom and China, which could still prove to be the glue that holds together an increasingly unstable relationship.
As Emily Taylor’s Chatham House International Security Program claims: “Mutual dependence creates stability and if it is compromised, global stability will be affected.”
TikTok currently employs around 1,000 people outside of China, with most of them based in the UK and Ireland.
The Sunday Times reported that TikTok’s decision to build its UK office has the potential to create 3,000 jobs.
The Chinese video sharing platform is extremely popular and the app has been downloaded two billion times.
US Secretary of State Mike Pompeo – who will visit the UK this week – previously said that Washington is considering banning TikTok.
But last week, President Trump’s chief economic adviser, Larry Kudlow, seemed to change course and said, “As has been reported in some places, I think TikTok will withdraw from the holding company which is managed by China and operate as a company. independent American.
“This is a much better solution than the ban [or] pushing away. “
Pompeo says that American users of TikTok are at risk of their data ending up “in the hands of the Chinese Communist Party”.
A TikTok spokesman said: “We never gave user data to the Chinese government, nor would we do it if requested.”
India has already blocked TikTok and other Chinese apps. Australia, which has already banned Huawei and telecommunication equipment maker ZTE, is considering banning TikTok.