US policymakers are turning up the heat on TikTok

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

A striking story is bubbling away in the private capital world about Chinese tech company ByteDance, owner of the short-form video platform TikTok. 

This is not (just) about accusations that TikTok’s user community has a pro-Palestinian slant; nor that social media is harming teenage mental health. Instead, this issue is ByteDance’s balance sheet: financiers close to the company recently told the FT that this shows more than $50bn in free cash, of which $5bn is earmarked for buybacks — a prospect that might tempt some investors to sell out, given the rising (geo)political heat.

Foreign policy experts and investors alike should watch this closely. For as 2024 looms, ByteDance has become a key litmus test of US-China relations — and the extent to which they are sparking not just a Sino-American tech, trade and cyber war, but a capital markets conflict too. 

That is because ByteDance’s ownership structure is striking. The group is often described as “Chinese”, since its founder, Zhang Yiming, hails from the mainland and has been labelled a “mouthpiece” of the Communist party by US officials. However 60 per cent of ByteDance shareholders are “international”, mostly American.

Congressional testimony suggests these include equity funds, such as BlackRock and Fidelity, who hold stakes as part of emerging market baskets. However the venture funds Coatue, General Atlantic, SoftBank, Sequoia, KKR and Susquehanna have notable stakes and their representatives — such as General Atlantic’s Bill Ford — are on the board.

The problem for them is that parts of Congress and the US foreign policy establishment increasingly view the platform as a Chinese tool to manipulate American minds, either directly or by stoking dissent. One sign of this emerged last month when Nikki Haley, a Republican presidential candidate, accused the…