Chinese social media giant TikTok has reportedly shelved plans to build a global headquarters in London amid growing concern about Beijing’s influence in Britain.
TikTok, a viral video app which is popular among teenagers, had been in discussions with the Department for International Trade and No 10 to establish a worldwide base in the capital.
The app, which has 800 million users, planned to invest as much as £3 billion on making the UK its home outside China and would have created around 3,000 jobs, sources claimed.
TikTok’s parent company ByteDance has now made the decision to suspend those negotiations due to the ‘wider geographical context,’ the Sunday Times reported.
The move comes amid increasing tensions between London and Beijing, stemming from the Government’s criticism of the Hong Kong security law and a recent decision to ban Huawei from Britain’s 5G network.
An unnamed source reportedly told the paper the plans could be revived should relations between China and the UK improve, however they added a decision would not be coming ‘any time soon’.
A statement from TikTok said: ‘We remain fully committed to investing in London and inspiring creativity and bringing joy to our users around the world.’
Meanwhile, a Government spokesperson added: ‘ByteDance’s decision on the location of their global HQ is a commercial decision for the company.
‘The UK is a fair and open market for investment where it supports UK growth and jobs.’
Elsewhere, Washington is considering placing TikTok’s Beijing-based owner ByteDance on its blacklist, effectively barring Americans from downloading and using the app.
White House officials are also weighing alternative plans, including allowing TikTok to continue operating as long as the company splits from its Chinese parent and sets up its headquarters in the US and not the UK.
Sources familiar with the matter last night said London was still being considered as an option for the HQ. However, they warned that the company would need to consider the impact of the US government’s plans and how it would affect the company’s operations.
Banning the app in the US, where it has almost 50 million users, would be a major blow to the company.
Tomorrow a fierce critic of the company, US Secretary of State Mike Pompeo, will arrive in London to meet Boris Johnson and Foreign Secretary Dominic Raab to discuss issues including China and the coronavirus pandemic.
There is mounting speculation that he will use the opportunity to single out the firm as a tool of the Chinese state.
When asked on Fox News earlier this month whether US citizens should download TikTok, Mr Pompeo said: ‘Only if you want your private information in the hands of the Chinese Communist Party.’
He also threatened to ban ByteDance by placing it on the US’s so-called ‘entity list’. Officials have said a decision could come within weeks.
London, Singapore and Dublin were among the locations being considered by TikTok, reports suggested in December. No US cities made the shortlist.
But now, TikTok may be forced to establish a major base in the US to salvage its business there.
TikTok does not currently have an official headquarters, although its most senior executive is based in Shanghai.
Senior Ministers are already understood to be pushing for TikTok to be banned in the UK over its links with the Chinese state.
TikTok denies it is a security risk. It says it has never given user data to the Chinese government and it would refuse to do so if asked.
But critics of the company say that China’s intelligence laws compel internet companies such as TikTok to provide data to the Communist government if it demands it.
It comes days after Britain decided to ban Huawei from operating large swathes of its 5G network, with mobile operators banned from buying any more 5G equipment from the Chinese company from December 31.
The Government has set 2027 as the deadline by which to remove all of Huawei’s kit.
Like TikTok, Huawei is a private company, but its founder is a former member of the People’s Liberation Army and there are fears the Chinese government could use its power to demand access to sensitive information.
TikTok has attempted to allay concerns about its links to the Chinese state by hiring an American chief executive, former Disney executive Kevin Meyer. It has also been beefing up its policy team in recent months to combat the mounting political row over the company’s ties to China.
Among those recruited was Theo Bertram, a former adviser to Tony Blair and Gordon Brown.
Other measures include pulling out of Hong Kong in the wake of the controversial security laws granting more power to Beijing.
The company has also tried to differentiate the Western app TikTok from the Chinese version, which is known as Douyin.
India banned Chinese-owned apps such as TikTok and WeChat at the end of last month amid similar concerns about data being leaked to the Chinese Communist Party. Australia is also weighing a ban.
Since launching in the UK in 2017, TikTok has exploded in popularity and is tipped to have more than ten million users by next year.
The company has been on a hiring spree in London, which has quietly become its largest office in Europe. Its biggest office is in Los Angeles and it also has bases in Paris, Dublin and Berlin.
A ByteDance spokesman said: ‘The UK is one of our most important markets globally, with a talented and diverse team in London, including senior leadership.
‘UK employees have quadrupled over the past year and we expect continued strong growth.
‘We remain fully committed to investing in London and inspiring creativity and bringing joy to our users around the world through our products and platforms.’