TikTok enlists army of lobbyists as suspicions over China ties grow

US Secretary of State Mike Pompeo has threatened to ban the app over surveillance concerns.

TikTok, the wildly popular social media app known for its viral dance and lip sync clips, has been embraced by millions of students, celebrities and young adults across the United States. But the company’s ties to China could cripple its existence.
TikTok, which is owned by the China-based ByteDance, has become the latest target in the Trump administration’s long simmering security and economic battle with Beijing. It is now desperately trying to convince lawmakers and administration officials that its allegiance lies with the United States, not China.

The social media company, which one year ago had virtually no lobbying presence in the nation’s capital, has hired a small army of more than 35 lobbyists to work on its behalf, including one with deep ties to President Trump.

Behind that buildup is a growing threat to one of TikTok’s most important markets. Secretary of State Mike Pompeo has threatened to ban Chinese apps like TikTok, which are downloaded to mobile phones, over concerns they could be used for surveillance by the Chinese government. Peter Navarro, the White House trade adviser, called TikTok’s new chief executive an “American puppet” during a Fox Business interview on Sunday and said the administration would take “strong action” against the company and other Chinese social media apps.

A powerful US panel has opened a national security review into Bytedance’s 2018 purchase of Musical.ly, an app that was merged to form TikTok. The Committee on Foreign Investment in the US is examining whether the merged companies could give the Chinese government access to vast amounts of American data, including videos useful for training facial recognition software. And the Trump administration is weighing action against Chinese social media services like TikTok under the International Emergency Economic Powers Act, which allows the president to regulate international commerce in response to unusual and extraordinary threats, people familiar with the deliberations say.

Chinese firms take record 50% of global equity raised in first half of 2020

China-based companies sold shares worth $32.1 billion in January-June including multi-billion-dollar secondary listings in Hong Kong.

Firms in China brought in half of equity capital raised globally this year so far, setting a record that highlights the economy's earlier revival from the COVID-19 pandemic, plus the degree to which soured U.S. relations are turning Chinese firms homeward.

China-based companies sold shares worth $32.1 billion in January-June including multi-billion-dollar secondary listings in Hong Kong, equivalent to 49.8% of worldwide offerings, showed data from Refinitiv. The total for U.S. firms was $15.8 billion.

"With massive liquidity injections by various governments (supporting virus-hit economies), I'm not surprised by the size of Chinese capital raised this year - and the trend may continue," Li He, capital markets partner at Davis Polk, said of China firms taking advantage of their early lockdown emergence.

China was hit by the novel coronavirus in December and was the first country to impose virus-prevention lockdown measures on individual movement and business activity in late January. Markets began their return to normality in April.

Chinese fundraising has been helped by the popularity of Shanghai's year-old growth-focused STAR Market, as well as well-received initial public offerings (IPOs) in Hong Kong and the massive secondary listings - including the $3.9 billion raised by e-tailer JD.com Inc this month and $3.1 billion by games developer NetEase Inc

"For Chinese companies, both the Hong Kong and U.S. markets are getting back to normal," said Houston Huang, head of global investment banking for China at JPMorgan. "Market activity (deal volume) is much better than anybody expected at the beginning of the year."