So as the TikTok US business sale could be announced “in the next 48 hours“, very likely to the consortium of Microsoft and Walmart, share prices of both rose sharply. Investors came in, anticipating that an announcement over the weekend would send the share prices surging.

Everybody seemed to have forgotten about another major stakeholder: the government of China.

Late on Friday evening, the Ministry of Commerce suddenly put up a release saying that it had expanded the negative list on technology export.

“Personalised information recommendation services based on data analysis” – the very technology that defined the success of both Toutiao and TikTok (and its Chinese domestic counterpart Douyin) – was on the list.

Almost the same time, Xinhua News Agency, the official mouthpiece, released an interview with an expert on international trade, Prof Cui Fan of University of International Business and Economics. Prof Cui used potential TikTok sale as an example to illustrate the new legislation, and urged parties to ‘seriously study the new rule’.

You tell me that this is coincidence?

What we do know is that Chinese government does not like ByteDance, because its news recommendation service Toutiao was regarded by many in the officialdom as ‘decadent’ and ‘corrupt’. The Department of Publicity (f.k.a. Department of Propaganda) even tried to force feed a rival service, alas that turned to be great failure as the people inside were more interested in doing politics rather than developing the business.

However, it probably feels compelled to act, to show a stance, get some bargaining chips, and maybe genuinely want to stop the deal. We do not know what is the real motive, or whether any significant lobbying effort was behind the scene. And we believe most of the analyses we read online (especially in China) are bull***t.

Either way, ByteDance issued an official memo that it would “strictly adhere to” the new laws.

Walmart and Microsoft share prices might head for a landing, at least for the early trading hours of Monday.

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.