TikTok Saga: How China Outplayed Trump and Won the Long Game

In the high-stakes game of global politics, nothing is free. You give to get, and the same ironclad rule applies to US-China trade negotiations.

On September 25th, Trump was all smiles as he signed an executive order to push through the acquisition of TikTok's US operations. He made sure to emphasize that the deal would meet the national security demands of a 2024 law. Meanwhile, his Vice President, Vance, threw out a figure, valuing TikTok at $14 billion. As he signed the order, Trump couldn't resist boasting to reporters about how he single-handedly brought in shareholders for the new US version of TikTok. The media quickly named the players: Oracle and private equity firm Silver Lake, among others, would be the main investors, scooping up a 50% stake.

Trump's Hollow Victory

To hear Trump tell it, he'd scored a massive win, successfully forcing the Chinese company ByteDance to sell off a controlling stake in TikTok's American business. But Trump was only telling half the story—the half that lets him brag to his base that he's "winning bigly." While China has remained characteristically low-key about the deal, details disclosed by media in both mainland China and the US paint a completely different picture.

In fact, the real framework of the deal, as outlined by mainland China's Guancha.cn, is far more clever. TikTok’s US business isn't being sold off as a single entity. It's being split into two separate companies. The foreign-controlled joint venture that Vance mentioned is just one part of the equation, a company called the "TikTok US Data Security Joint Venture," and it certainly doesn't represent the whole of TikTok's US operations. According to earlier estimates from Bloomberg, the entire US business is worth closer to $40 billion, not a mere $14 billion.

The Two-Company Structure

Here’s the breakdown of the operational plan that China and the US actually hammered out. It involves two main companies. The primary one is the "ByteDance TikTok US Company." This entity will remain the core operating company, handling all the crucial commercial activities like e-commerce, brand advertising, global connectivity, and product support. Crucially, this main US company will remain 100% owned by ByteDance.

The company Trump and Vance keep talking about is the other entity in this dual-body structure: the "TikTok US Data Security Joint Venture." This is where things get clever. This company will be responsible for handling US user data, content moderation, and software security. ByteDance will hold a 19.9% stake, conveniently keeping it just under the 20% threshold to avoid being classified as an associate company under US law. However, ByteDance's existing global shareholders will hold another 30.1%, while new investors like Oracle will have a combined 50%. But make no mistake: as a single shareholder, ByteDance's 19.9% stake makes it the largest individual shareholder.

And what about control? The board will have seven seats. ByteDance gets one, its existing global shareholders get two, the new investors get three, and an independent director gets the last one. But here’s the real kicker: the algorithm. ByteDance retains full ownership of its intellectual property. It will simply license the relevant IP to the "TikTok US Data Security Joint Venture" and collect licensing fees in return.

Who Really Profits?

When you analyze this two-company solution, the genius of China's strategy becomes crystal clear. The wholly-owned "ByteDance TikTok US Company" keeps 100% control of the real money-makers—e-commerce and brand advertising, which are TikTok's main revenue streams. Meanwhile, the US joint venture is saddled with all the high-cost, non-profit-making operations like data and content security. Content moderation alone requires hiring a massive number of staff. It's expected that this US joint venture will end up charging the main TikTok US subsidiary for its services, making it function more like a landlord with a stable rental income than a dynamic commercial enterprise.

This setup isn't even new; it mirrors how American tech giants operate in China. Take Apple, for instance. All its operational data in China is stored with "Cloud Big Data (Guizhou)," which is a 100% Chinese state-owned enterprise in which Apple holds no stake at all. In contrast, TikTok still retains the single largest shareholding in its new "US Data Security Joint Venture."

A Strategic Play, Not a Sell-Out

Many outsiders mistakenly thought TikTok was franchising its entire operation to the US joint venture, like a Disney theme park. The reality negotiated between Trump and China is far more limited. Only the cost centers—the data and security businesses—were handed over. This also explains why a company like Oracle was so keen to get involved. Managing data and security is Oracle's bread and butter. By investing in the joint venture and then taking on that business, Oracle can easily calculate its return on investment.

So, let's call a spade a spade. After tough negotiations, China only ceded its data security business to a US-led joint venture while keeping total control over TikTok’s profitable US commercial operations. Trump gets to put on a show for the cameras, but in reality, China has walked away with a major victory.

Xi's Grand Chessboard

This isn't just my analysis. The Wall Street Journal's chief China correspondent, Lingling Wei, hit the nail on the head in a September 24th article. She pointed out that while Trump was busy grabbing the TikTok deal, Chinese President Xi Jinping was playing a much larger game of chess. The Journal believes Trump, desperate for a quick win to show off before the election, couldn't afford endless negotiations with no trophy. He needed a result, any result, to avoid looking weak.

For China, the calculus was completely different. By offering Trump a small, face-saving compromise, China secured something far more valuable: a stable future. In the next year, Trump might visit China, and President Xi might travel to the US for the G20 summit. This effectively locks in a one-year cooling-off period for US-China relations. For China, time is the ultimate prize. The Wall Street Journal concluded that President Xi got what any grand strategist values most: an entire year, all while keeping firm control of the situation.

I call this the "peach theory." China tossed Trump a small peach to execute President Xi's grand strategy. With China's incredible pace of development, one year for it is like five years for the US. By buying time to strengthen itself on all fronts, China ensures it will leave its opponent further and further behind.

Lo Wing-hung

Bastille Commentary

** 博客文章文責自負,不代表本公司立場 **

The One Diplomat Rocking the Boat

You wouldn’t think a foreign diplomat would directly undermine their own president’s grand diplomatic strategy, but that’s exactly what’s happening in Hong Kong right now. Trump has made summit-level diplomacy with China his priority—calling President Xi Jinping multiple times this year to ease tensions and discuss key issues like trade and TikTok.

Under this high-level engagement, US-China relations have been stabilizing. Trump even announced plans to meet Xi again at the upcoming APEC summit in South Korea and hinted at future reciprocal visits. It’s the kind of positive momentum no one wants to see wrecked—yet that’s the risk with the current US Consul General in Hong Kong.

In August 2025, Julie Eadeh took over as US Consul General in Hong Kong and Macau. She’s no rookie—she was the political chief at the US Consulate during the chaotic 2019 protests. Back then, she was snapped meeting Nathan Law and Joshua Wong in Admiralty, and later that same day chatting with opposition heavyweights like Alan Leong, Martin Lee, and Anson Chan at the American Club.

No wonder Chinese media dubbed her “the subversion expert.”

The US would never stand for foreign meddling like this. Earlier this year, Immigration and Customs Enforcement arrested a Columbia University student with a green card who supported Hamas, revoked his green card, and ordered his deportation.

Imagine if China’s Ambassador in the US was caught supporting such a figure. Would Trump let that slide? Of course not.

Old Habits Die Hard: Julie Eadeh’s Provocations

Fast forward six years, and US-China relations have shifted to dialogue instead of confrontation. But Julie Eadeh seems stuck in the past. She’s throwing reception after reception with major opposition figures in Hong Kong— prominent anti-government players Anson Chan and Emily Lau to official events.

This isn’t by accident; it’s provocation.

On arrival, Eadeh pulled out the usual diplomatic charm, saying she’d engage with all sectors of Hong Kong society. But in reality, she’s normalizing foreign interference, portraying calls for a color revolution as simple democracy promotion.

This is just the first chapter of a renewed foreign meddling playbook in Hong Kong—testing the limits of the city’s national security laws. If left unchecked, she’ll write chapters two and three and more.

 Some might argue, why ban the US Consulate from meeting local figures? Well, Chinese diplomats in the US face the opposite problem—many Americans who once met them now avoid contact, fearing the Trump administration’s repercussions.

Imagine if Ambassador Xie Feng threw a party inviting Joe Biden, Kamala Harris, or even Antifa members -- would Trump be okay with that?

 Playing With Fire

Julie Eadeh’s risky political games may not be ordered by Trump himself—he’s got bigger geopolitical fish to fry—but if she crosses a line, triggers Beijing’s fierce reaction, and wrecks the narrative of strong US-China leadership ties, she’ll have to face the consequences.

At the end of the day, American diplomats shouldn’t work outside the president’s strategy.

Hong Kong’s stability didn’t come easy. The city is now at its best, and foreign forces trying to mess with it won’t succeed.

Lo Wing-hung