Business | Dancing with the state

Bytedance teams up with a state-run Chinese publisher

The move is unlikely to endear TikTok’s parent company to Western critics

|SHANGHAI

TIKTOK, A CHINESE-OWNED short-video app no Western teenager can do without these days, stresses its independence from the authorities in Beijing. Its parent company, less so. Bytedance, whose $75bn valuation makes it the world’s biggest unlisted startup, has just teamed up with Shanghai Dongfang Newspaper Company, a state-run publisher. Bytedance will own 49% of the joint venture. An official filing made by the joint venture states it will, among other things, develop technologies such as artificial intelligence (AI), although a spokesperson for Bytedance denies that this will actually be the case.

Listen to this story.
Enjoy more audio and podcasts on iOS or Android.

It is not Bytedance’s first jive with the state. Since its founding in 2012 it has worked with most news organisations in China, many of them state-run, which it needs to feed Jinri Toutiao, its news app—all the more so since the launch two years ago of “New Era”, a channel that reports chiefly about government goings-on. In 2018 it hired a former anchor at CCTV, China’s state television, as vice-president. In April it signed a strategic partnership with Beijing Time, a news platform linked to the Beijing Municipal Party Committee.

Toutiao is periodically chastised—by the government and users alike—for a dearth of serious content. The joint venture is looking to fill that gap. Shanghai Dongfang owns the Paper, a serious outlet which does proper investigative work (even if state censorship can dull its edge).

Nor is Bytedance the only big Chinese tech firm that works closely with state-owned enterprises, especially in areas such as AI that the Communist Party regards as strategic. In 2016 Baidu, China’s biggest search engine, agreed to develop technology with a state-owned telecoms firm. In June Jack Ma, the founder of Alibaba, an e-commerce behemoth, met with SASAC, a government body which oversees state firms, to discuss tie-ups to promote digital innovation. Tencent, another internet giant, has been urged to do the same.

Natural though it may appear in China, the joint venture comes weeks after America’s government opened a national-security review of TikTok on worries that it gives Beijing access to data on millions of Americans and censors content the regime does not like. Bytedance insists that data on non-Chinese users sit on non-Chinese servers and what Americans are or aren’t shown is decided in America. It adds that its new Chinese initiative will “focus on digital rights of short videos”. Such assurances are unlikely to impress its critics.

Clarification (January 1st 2020): This piece describes a Chinese joint venture between Bytedance and a state-run firm. An official filing says that, among other things, it will develop technologies such as artificial intelligence. However a Bytedance spokesperson denied that this would be the case. The article has been amended to include Bytedance's comment.

This article appeared in the Business section of the print edition under the headline "Bytedancing with the state"

Pessimism v progress

From the December 21st 2019 edition

Discover stories from this section and more in the list of contents

Explore the edition

Discover more

Making accounting sexy again

The profession needs a makeover to attract newcomers

A marketing victory for Nike is a business win for Adidas

The contest of the sportswear giants heats up


The pros and cons of corporate uniforms

A quarter of the American workforce wears one. Why?