“We Show Who’s Boss Hot Spots”: How China Organizes Its Tech Barons | Internet

IIn April 2022, the spread of Covid apparently spread through the financial center of Shanghai. The government imposed a strict lockdown, confining millions to their homes, triggering mass testing on a scale unprecedented since the initial outbreak, and angering wealthy urbanites who were increasingly skeptical of China’s Covid-zero policy. In an effort to control public opinion, the government has told social media sites including WeChat – the super-app used by two-thirds of China’s population – to scan and scrape posts deemed negative or critical of politics.

But censorship backfired. There was an unprecedented public outcry, which turned into a virtual protest. A video has begun circulating online documenting the terrible repercussions of the closure. The six-minute video known as April Voices — a montage of audio recordings that includes the cries of children separated from their parents during quarantine, residents demanding food, and the calls of a son seeking medical help for his seriously ill father — resonated with dozens of people. Millions in Shanghai and more across the country. The video was soon flagged as prohibited content and removed from social media platforms in China. On Weibo, the Twitter equivalent, even the word “April” has been temporarily blocked from search results.

The video was seen by many as an impartial but essential documentation of the human toll in the Shanghai lockdown. A backlash ensued, with United users repeatedly sharing the video in ways that could bypass web censorship. Some posted the video upside down, others overlaid words, pictures, or included other footage. WeChat moderators tried to delete posts sharing the video, but it was like a multi-headed hydra: once one got blocked, another showed up. This defining moment embodied the dynamics between the Chinese government and the country’s tech giants. On the front line has been Tencent, the entertainment and technology group that owns WeChat.

For the better part of three decades, Beijing has tolerated and even celebrated entrepreneurship. With the country leaping into the digital age, China produced one billion dollar company every 3.8 days in 2018, just one year after Tencent overtook Facebook to become the world’s fifth largest. Funds raised by private equity funds and China-focused ventures have nearly quadrupled, to $120 billion. This bounty has helped China transform from industrial stagnation into one of the most dynamic and desirable markets on the planet.

In addition to generating revenue, companies like Tencent have complied with government orders when it comes to monitoring their citizens. For an authoritarian regime that rules a scattered population in an area roughly the size of the United States, an app that dominates every aspect of life is proving very useful. Some say WeChat should be called WeCheck, as is its ability to mass monitor.

A visitor to the China International Animation and Games Exhibition in Shanghai. Tencent owns large stakes in gaming companies, including Fortnite maker Epic. Photo: Alex Blavevsky/EPA

The early days of Chinese technology also saw the construction of the Great Firewall in China. One in five people on the planet uses the internet through a filter that blocks Facebook, Twitter, Snap, Instagram and The New York Times and YouTube. In a sense, it is a parallel world, where nearly a billion people live and thrive – to the astonishment of Westerners – on the China equivalent of such a mainstay. There’s Meituan for Deliveroo, Didi Chuxing for Uber, and WeChat for WhatsApp and Facebook.

Services are often better in terms of convenience and design. WeChat, the Swiss army knife of a super app, is the most adept at integrating the functionality of various western platforms, allowing people to chat, shop or order takeaway. WeChat is known locally as Weixin, and the company has taken care to stress that it operates as two apps both on and off the mainland. China’s lack of privacy controls means that its companies and government have an advantage when it comes to collecting data that enables algorithms that scrutinize, monitor, shame, and sometimes even imprison their citizens.

The dynamics between Chinese tech companies and the authorities are unparalleled. Before the pandemic, I once sat down with an official and talked about the ups and downs of startups and entrepreneurs. “No matter what kind of sexy person you are, we will always have a way to show you who the boss is,” said that person, making an impromptu remark about Tencent’s owner, Pony Ma. “Don’t think because you control a billion users and you’ve moved to Singapore or some country abroad we can’t do anything about you.” The administrator told me that when regulators felt that Tencent needed to teach a lesson, they would ramp up censorship efforts or block or shut down web services until the company got the message across. The tactics weren’t always straightforward. Due to WeChat’s external ambitions at the time, they sometimes disabled its service for global users, delaying messages or transactions by only half a minute. “This small disruption is more than enough to drive users crazy and get people to abandon the app completely,” said this person. “This is how you show them some colour.”

The wall no longer exists only within China. When the Chinese travel outside the country, the wall follows them through their telecom service providers. Anyone using a China Mobile sim card is prohibited from roaming on Google. Authoritarian states in Africa, Southeast Asia and Russia see the model’s appeal. They also want to create their own intranet. With the internet split in two, aligning itself between the American and Chinese models, the Tencent story provides a window into an alternative vision of what the global internet world could become.

Tencent headquarters, a huge building with many colored windows
Tencent headquarters is in Shenzhen, Guangdong Province. It is one of the largest gaming, social media and investment companies in the world. Photo: David Kirton/Reuters

Tencent products are very convenient and intuitive; However, in the back of everyone’s mind is the knowledge that every movement, position and speech is documented and likely to be scrutinized. Nowhere is this contradiction more evident than at Tencent’s corporate headquarters, in the heart of southern Shenzhen’s high-tech district.

It took five years and more than half a billion dollars to build the Tencent office. Ma chose NBBJ, the architect in charge of the Amazon, Google and Samsung headquarters. But the billionaire wanted it to be more than a statement of financial generosity. With its twin gleaming twin towers of glass and steel, it has transformed the building into one of the world’s largest laboratories for new internet services and connected devices. It features holographic tour guides, conference rooms that adjust temperatures based on attendance, and alerts for best parking spots before passengers arrive.

What struck me is that the influence of the Communist Party is omnipresent within the corridors of the building, which is a towering anthem for the future and commerce. In the open-plan reading room, alongside books about the cosmos and the ancient Greek and Roman empires, Chinese President Xi Jinping’s book—which chronicles his speeches and thoughts on how to govern—appears on the most prominent shelves. QR codes in the gym display links to stories documenting battle victories during the Long Walk.

Even these demonstrations of loyalty are not enough. Common sense would suggest that the Communist Party would be supportive of companies like Tencent and encourage their expansion abroad. But Xi chose to make sure that the aspirations of the rising class of ultra-wealthy businessmen were tamed before they turned into politics. It was only a matter of time before these national heroes would catch up.

Men walk away from a robotic food truck with bags
WeChat Pay from Tencent has more than 900 million users and is accepted by sellers like this robotic food truck in Guangzhou. Customers wave to the car to get it to stop and serve them. Photo: Anadolu Agency/Getty Images

The campaign, which began with the fintech industry in 2020, has rapidly expanded to cover every sector from online education to gaming, and from delivery to food delivery. With footprints in all of these sectors with its investments in about 800 companies, Tencent felt the pinch.

Despite Pony Ma’s reputation for being the most underrated and cautious Chinese tech tycoon, Tencent is not without it. China halted its app rollouts for about a month in late 2021, cut playtime for under-18s, ordered overhauls of its financial units, fined it for investment deal disclosure violations and suspended new approvals for games this year.

The change in the technology sector’s approach depends on shifts in Xi’s priorities. It mirrors crackdowns in other sectors, including real estate. As China’s economy slows and Xi attempts to increase the country’s birth rate, the policies underscore the Communist Party’s growing determination to respond to growing public discontent with overcrowded wealth and narrowing avenues of progress.

The phrase that has appeared alongside the crackdowns is “shared prosperity,” which refers to China’s goal of becoming a modern socialist society. The implications for China’s technology industry are far-reaching, and could shape the rules of the game for the next few decades.

There is a Chinese saying that says “Li yu tiao long men” – “Carp jumps over the dragon gate.” Legend has it that if a carp could swim upstream and arch over a waterfall on the Yellow River, it would transform into an eastern dragon, a snake-like creature that symbolized imperial power. The story of China’s internet tycoons, like Bonnie Ma, over the past two decades is the story of a generation of carps turning into dragons. However, the twist is that these idealistic geeks, who had ventured out to change the world, were now chained up and part of a system they wanted to change. Once the self-made dragons have achieved the level of success they have in China, the most important question seems to be: When and how do they bend unharmed?

  • This is an excerpt from Empire effect By Lulu Chen, published by Hodder & Stoughton (£25). to support guardian And the observer Request your copy at guardianbookshop.com. Delivery charges may apply

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