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

** The blog article is the sole responsibility of the author and does not represent the position of our company. **

In a series of blistering statements,The Hong Kong Office for Safeguarding National Security (OSNS) has drawn a red line in the sand for anyone trying to weaponize the city’s recent misfortunes. The message is crystal clear and ominous: If you use disaster to sow chaos in Hong Kong, they will hunt you down—no matter where on Earth you try to hide.

On December 3, an OSNS spokesperson doubled down. While the HKSAR government and local citizens were racing to save lives following the tragedy at Wang Fuk Court in Tai Po, a shadow game was already in play. The office accuses a "small group of external hostile forces" of looting a burning house. Under the guise of petitioning for the people, these actors are dusting off the old playbooks from the "extradition bill protests". They are activating agents, sabotaging relief efforts, and desperately trying to reignite the "Black Riots" memories. The verdict? Their actions are despicable enough to be universally condemned.

To drive the point home, the OSNS fired off three consecutive warning shots to overseas antagonists and anti-China disruptors:

First, we solemnly warn hostile foreign forces and anti-China disrupters that their actions of creating chaos and disorder in Hong Kong are intolerable.

Second, we solemnly warn hostile foreign forces and anti-China disrupters that their actions of adding fuel to the fire will inevitably bring disastrous consequences to themselves.

Third, we solemnly warn hostile foreign forces and anti-China disrupters that the long arm of the law will catch up with them.

The OSNS is keeping receipts. Every word and every action used to disrupt Hong Kong goes on the permanent record, and culprits will be pursued for life. "Anyone who breaks the law," the office warns, there is no sanctuary. Whether you are hiding across the ocean or taking refuge in Taiwan, severe legal punishment is inevitable.

Why is the OSNS speaking up now? Read between the lines, and you see three strategic pivots.

First, this isn’t hypothetical; they believe the foreign interference is already happening. Second, the crosshairs are locked on external forces, with a pointed finger specifically at those hiding in Taiwan. And third, it’s a preemptive strike against anyone overseas dreaming of stirring up another color revolution. The warning is blunt: Distance is not a defense.

Opportunists, Grifters, and Organized Lies

Take a look at the chatter exploding across the internet, and the opposing voices generally fall into distinct camps.

First, you have the fair critics. There is plenty of commentary that, while critical of the SAR government, remains objective. These observers stick to the facts disclosed by official investigations rather than drifting into malicious fantasy. This is a natural, human reaction to a "disaster of the century." And the smart money says the SAR government will take this advice to heart and improve.

Then come the fame vampires. When disaster struck, the opportunists came out of the woodwork. Look at "internet celebrity" Kenny, arrested on December 3 after cursing the Tai Po fire victims online for having "heavy sins." It was a blatant, tasteless grab for traffic, and it landed him in handcuffs for sedition. Then there are the exiled influencers abroad, wantonly bashing the SAR government while coincidentally begging people to subscribe to their Patreon accounts. The hustle is obvious: They are monetizing misery to please their financiers.

Finally, there is the organized sedition. Beyond the grifters, we are seeing waves of calculated propaganda. These aren't just complaints; they are fabrications designed to smear the SAR government and attack the Central system. Rumor mills are churning out wild stories linking material suppliers to the families of Central leaders—plots that are total fiction. It’s as if they believe overthrowing the Central government provides immunity from fire physics. Do massive fires not happen in Western democracies? The logic is broken, but in the heat of a disaster, it’s a potent recipe for inciting public rage.

Sniper Attacks From The Shadows

The temperature on these seditious campaigns was rising fast until the Police National Security Department stepped in. Once they acted, the local noise quieted down—but the overseas attacks only intensified. It raises a suspicious question: Is there a coordinated machine working behind the scenes to sustain sniper attacks against the SAR government? The narrative is set in stone: Whatever the government does is wrong. Before a single investigator has arrived on the scene, the instigators are already screaming for heads to roll.

Here is the bottom line. The OSNS isn’t pointing fingers at external forces for sport; they are firing warning shots because they see the smoke rising. We need to be sharper than ever. Don't let external opposing forces play you for a fool, twisting a tragic fire into a tool for subverting the local government—or even the Central government itself.

Lo Wing-hung