This is the web version of Eastworld, Fortune’s newsletter focused on business and technology in Asia. Subscribe here to get future editions in your inbox.
In journalistic argot, a “tick-tock” is a type of news story that focuses on the minute-by-minute chronology of events as they unfold. Reuters published a humdinger yesterday about a company named—you guessed it—TikTok.
The Reuters account goes a long way towards explaining how a White House “deal” to save the Chinese-owned short video app from a presidential ban blew up—and offers fresh ammunition for critics of the Trump administration’s chaotic and often contradictory dealings with China.
The broad contours of a TikTok agreement, according to Reuters, were hashed out by Friday in a frantic round of negotiations led by Treasury Secretary Steven Mnuchin. Key points were spelled out in a 20-page revision, “awash in red font with mark-ups,” to an initial proposal submitted four days earlier by TikTok’s parent company, Beijing-based ByteDance.
The revised term-sheet called for: ByteDance to sell shares in the venture to Oracle Corp. and Walmart; Oracle to act as “technology partner,” reviewing software updates from Beijing, hosting data of the app’s 100 million American users on its cloud, and assuring U.S. regulators that data was inaccessible to officials in China; TikTok to move headquarters to Austin, Texas, create 25,000 new jobs, and launch an educational initiative for children.
The deal wasn’t done. Fundamental questions—about ownership, management control, and the tech specs for maintaining and updating the algorithms that make TikTok so popular—remained unresolved. No one had signed anything. But never mind. Trump couldn’t resist crowing publicly about a U.S. victory on Sunday.
By Monday, parties on both sides were backpedalling, and issuing conflicting statements about what had been agreed. On Wednesday, Beijing denounced the proposed sale in state-controlled media and signalled that it would rather let Trump put TikTok, with an estimated value of up to $60 billion, out of business than allow him to expropriate a Chinese company for American gain.
China, declared the Global Times, would not “hand over control of an outstanding high-tech Chinese company to extortionists.” China Daily, the state-owned English language newspaper, deplored the deal as based on “bullying and extortion.”
The two sides may yet find common ground. The Commerce Department has extended until Sunday its deadline for the companies to come to terms. Meanwhile, on Thursday ByteDance said it is now officially seeking Beijing’s approval for a potential sale.
But Tom Mitchell, writing in the Financial Times, sees a pattern in Trump’s inartful handling of the TikTok deal. Mitchell compared it to Trump’s 2018 failure to secure Chinese regulatory approval of U.S. chip-maker Qualcomm’s acquisition of Netherlands-based NXP in exchange for a U.S. reprieve from sanctions for Chinese telecommunications giant ZTE Corp. In that instance, “Mr. Trump gave [Chinese President] Xi what he wanted on ZTE…and mistakenly assumed that his concessions would smooth over other matters. China quickly pocketed the ZTE present but continued to withhold approval of the Qualcomm-NXP deal.”
Bloomberg‘s Andrew Browne—noting that China’s trade surplus with the U.S. has grown 25% since the start of the Trump administration while China is nowhere near meeting its target for increasing U.S. imports under January’s “phase one” trade agreement—goes even further in skewering Trump’s record in dealing with China. “The final scorecard is already in,” he writes. “On just about every metric that matters, Trump seems to have been outplayed and outsmarted throughout the global trade war that began shortly after he took office.”
Browne also points out that China’s economy is recovering while the U.S. remains mired in recession, and argues Trump’s efforts to decouple the U.S. and Chinese economies have succeeded only in pushing China further towards economic and technical self-sufficiency.
The New York Times piled on this week with a long assessment of how Chinese authorities view the prospect of a Biden presidency. The ostensible focus is on Biden, but it’s hard to miss the implicit criticism of Trump—whom the Times seems to suggest Xi would much prefer to his Democratic rival.
“In Beijing, Mr. Trump is viewed in some ways as favorable because of his transactional approach, despite the sharp deterioration in relations since the coronavirus pandemic,” the Times observes. “The Communist Party has also benefited from images of chaos and division that have emerged from the United States under Mr. Trump. That has allowed the propaganda organs to highlight the strengths of China’s authoritarian system in curbing the coronavirus outbreak.”
Trump supporters may find solace in this recent Politico survey finding that U.S. relations with China ranked “dead last” in importance among all issues presented to a sample of nearly 2,000 U.S. registered voters — from the economy (which took top billing) to the Supreme Court, to taxes. Politico‘s takeaway: whatever voters’ opinion of Trump’s record in dealing with Beijing, the issue won’t be a factor in deciding the outcome of the November election.
Eastworld takes a break next week as China celebrates its national day.
More Eastworld news below.
Clay Chandler
clay.chandler@fortune.com
This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com.
Eastworld news
Rock and an HSBC place
The London-based HSBC’s stock fell to its lowest point since the 2008 financial crisis this week as it attempts to put out fires on multiple fronts. On Sunday, leaked U.S. government documents that are now known as the FinCEN Files implicated HSBC in moving money from the U.S. to Hong Kong for an $80 million Ponzi Scheme. Over the weekend, China’s Ministry of Commerce also released more details about its long-anticipated unreliable entities list. China still has not disclosed the companies that may be on the list, which is thought of as China’s version of the U.S.’s blacklist, but Chinese state media reported this week that HSBC may be among the companies vulnerable to Chinese retaliation. South China Morning Post
Power grab
Malaysian opposition leader Anwar Ibrahim claimed on Wednesday that he has enough support to form his own government and wrest power from current Prime Minister Muhyiddin Yassin. Yassin denounced Ibrahim’s bid as “rash” and challenged Anwar to prove his assertion. Anwar’s next step will be to try and convince Malaysia’s king, known as the Yang di-Pertuan Agong, that he has enough support among Malaysia’s lawmakers to form a government. Anwar’s Tuesday meeting with the king, however, was postponed due to the king’s health issues and has yet to be rescheduled. Bloomberg
Flying again
Asia is starting to loosen its travel restrictions. This week, China announced that it will lift its ban on foreign nationals with valid Chinese residence visas entering the country starting on Sept. 28. The measure will come as a relief to the 250,000 foreign professionals working in China that have been stranded outside the country since China imposed the ban in March. Japan, which currently imposes entry bans on 159 countries, may begin allowing up to 1,000 foreign nationals per day from around the world to enter the country beginning in October. Neither China nor Japan will allow foreign tourists to enter their borders. Caixin
Mass detention
A pair of think tank reports this week reveal that China has ramped up campaigns to suppress its ethnic minorities. In China’s western Xinjiang province, the Australian Strategic Policy Institute found that China has built at least 380 internment camps that are used to detain and suppress its Uyghur Muslim population. This is over 100 more than previous investigations found, and highlights that construction has been ongoing in the last two years even as China has pledged to wind down construction of what it calls “re-education” camps. In a new report from The Jamestown Foundation, researchers found that China has begun to construct similar vocational training camps in the southern Chinese region of Tibet, which has forced thousands of rural Tibetans into military-style work and education camps. Washington Post
Loose cannon
Ren Zhiqiang, a Chinese property tycoon nicknamed 'Big Cannon' for his outspoken criticisms of the Chinese government, was sentenced to 18 years in prison in China this week on charges related to corruption and bribery. Ren, once an ally of high-level government officials, was detained in March after penning an essay critical of Chinese President Xi Jinping's handling of the COVID-19 pandemic. Experts say that Ren's imprisonment is likely to send shockwaves among China's elite, as the arrest showcases that Xi is willing to crack down on even wealthy and connected individuals if they dare to challenge the party line. New York Times
Coronavirus by country
Vietnam
The Southeast Asian nation has now beat COVID-19—twice. Vietnam has gone two weeks without recording a single locally-transmitted case after a July outbreak, which infected over 500 people in the eastern city of Da Nang, threatened to derail the country’s successful efforts to contain a first wave of the virus in the spring and summer. To contain the second outbreak, Vietnam imposed localized lockdowns in Da Nang, a mass testing and contact tracing scheme, and a universal mask wearing policy. Some critics have criticized Vietnam's heavy-handed approach in imposing lockdowns and restricting free speech during the pandemic, but analysts believe that its successful battle against the pandemic will ensure that its economy will fare better this year in comparison to neighbors experiencing larger COVID-19 outbreaks. Australia Broadcast Corporation
Markets and movers
Apple India – Apple opened its first online store in India on Wednesday, marking the first time Indian consumers will be able to buy Apple products directly from the American tech giant in the world’s second-largest smartphone market. Fortune
Ant Group – The financial technology firm, backed by China’s Alibaba, may debut in a dual-listing in Hong Kong and Shanghai as early as October, sources tell the Financial Times. Ant Group has already received a go-ahead from Shanghai’s Star Market and Hong Kong’s exchange may vet the company’s filing early next week. South China Morning Post
WM Motor – The Chinese electric vehicle start-up raised $1.5 billion from state-backed investors in the company’s largest-ever funding round. The five-year-old company hopes to become Tesla’s most formidable challenger in China, and may go public in Shanghai later this year. Nikkei Asian Review
Byju – The Indian ed-tech start-up is being valued at $11.1 billion as it seeks to raise over $500 million in a new fundraising round. The online tutoring and education company now has over 70 million registered students on its platform, up 25 million from the beginning of lockdowns in India. Deal Street Asia
WeWork – The co-working giant is scaling down in China, announcing this week that it is selling a majority stake in its China business to venture capital firm Trustbridge Partners for $200 million. Bloomberg
Final figure
2060
Chinese President Xi Jinping pledged this week that China will be carbon neutral by 2060, a bold announcement for the world’s largest carbon emitter. Xi made the pledge to the United Nations over video on Tuesday, and said that China’s carbon output will peak by the end of the decade. The pandemic has shown “humankind can no longer afford to ignore the repeated warnings of nature," and thus the world’s economy should pursue a "green recovery” in the post-COVID-19 era. Environmental activists heralded the announcement, but warned that China’s environmental pledges have not always aligned with its actions. Fortune
