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When Shou Zi Chew, the CEO of TikTok, appeared before the US Congress last week, he was interrogated about almost every aspect of the video-sharing company, from its links with the Chinese government to its impact on teenage depression. During the five-hour questioning, there was one topic that was barely mentioned: who actually owns TikTok?

Listening to the congressional questions, you might presume that the company is entirely Chinese, since TikTok’s parent group ByteDance was founded by Zhang Yiming, a Chinese internet entrepreneur. A bill in Congress seeking to block the app in the US — government employees in some states are already barred from installing it on government-issued devices — is premised on the notion that the company is under Beijing’s control.

Chew, who is Singaporean, denies this. “ByteDance is not owned or controlled by the Chinese government,” he insisted during the hearings. But the White House has urged ByteDance to sell TikTok if it wants to keep operating in the US.

As Chew told Congress, 60 per cent of ByteDance is owned by “international investors”. I’m told these are mostly American funds. Some are private capital. In a hearing last autumn, TikTok’s COO, Vanessa Pappas, told Congress their number included SoftBank, KKR, Coatue, General Atlantic, Sequoia and Susquehanna International Group. The last four all have representatives on the ByteDance board.

Pappas added, ByteDance’s investors also include global institutional funds such as BlackRock and Fidelity. T Rowe Price has previously indicated that it too is in the mix. So, even as ByteDance is lambasted for being Chinese, some American financiers seem to have significant stakes. (The company is private and does not have to disclose its governance structure.) 

Of course, this does not rebuff accusations about Beijing’s potential control. Zhang, who stood down as CEO and chair in 2021, owns a different class of shares; this may allow him to outvote everyone else, a structure common in Silicon Valley. And China has several explicit methods of control over ByteDance, including the power to mandate that Chinese tech companies disclose data to the state. It also has “a golden share” in ByteDance, which includes veto powers and nominating directors to the board.

These may be some of the reasons why US security officials are convinced that the Communist party has strong oversight of ByteDance. That impression was not dispelled last week when Beijing declared that it would oppose divesting any of its stake in TikTok. (China has control over exports of ByteDance’s algorithms and a say over acquisitions too.) 

This tussle over who really controls TikTok underscores the degree to which American finance and business remain deeply entwined with China. This connectivity is, if anything, growing even amid tension between the two countries. Last week, prominent US executives and financiers including Tim Cook of Apple and hedge fund luminary Ray Dalio arrived in Beijing for the so-called China Development Forum. Both publicly reiterated the country’s importance to their companies.

Because China’s footprint in emerging market stock indices keeps expanding, many American investors have de facto portfolio exposure to China. Hence the investment of Fidelity, BlackRock and T Rowe Price in ByteDance. The key point then is that the past few decades of globalisation have made it more difficult to identify the true nationality of many companies.

So it will be interesting to see what the US owners of ByteDance do next. Until now, the main public comment from them has come from General Atlantic’s Bill Ford, who in January observed, “There is a lot of misunderstanding and misinformation” about the alleged security threat from TikTok. I am told that people such as Ford are working behind the scenes to build bridges with the government. Meanwhile hordes of TikTok’s American users have posted messages on the forum in recent days decrying the congressional attacks.

DC insiders say that it’s entirely possible the White House will lean on the US owners to sell out if the row swells. If that happens, it would be an important sign that a conflict that started out as a tech and trade war is turning into a capital war, leading to new financial controls and blocks. Either way, the saga is a good metaphor for just how complex the US-China relationship has become. Certainly not something cheerily depicted in a TikTok video.

Follow Gillian on Twitter @gilliantett and email her at gillian.tett@ft.com

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