Tencent

The Political Economy of China’s Surging Internet Giant

Min Tang

• Publisher: Routledge
• Year: 2019
• eBook ISBN: 9780429514913
• Topic: Politics & International Relations
• Subtopic: Political Process
• Index: Politics & International Relations

In this book, author Min Tang examines the political economy of the China-based leading global Internet giant, Tencent. Tracing the historical context and shaping forces, the book illuminates Tencent's emergence as a joint creation of the Chinese state and transnational financial capital.

Tencent reveals interweaving axes of power on different levels, particularly interactions between the global digital industry and contemporary China. The expansion strategies Tencent has employed—horizontal and vertical integration, diversification and transnationalization—speak to the intrinsic trends of capitalist reproduction and the consistent features of the political economy of communications. The book also pinpoints two emerging and entangling trends— transnationalization and financialization—as unfolding trajectories of the global political economy.

Understanding Tencent's dynamics of growth helps to clarify the complex nature of China's contemporary transformation and the multifaceted characteristics of its increasingly globalized Internet industry. This short and highly topical research volume is perfect for students and scholars of of global media, political economy, and Chinese business, media and communication, and society.

1 History and Context

In May 1994 the first full Internet operation under TCP/IP protocol in China was established through a direct connection to the American telecommunication company Sprint.¹ Also that year, the first web server and the first set of web pages in China were launched at the Institute of High Energy Physics, one of the research institutions under the Chinese Academy of Sciences.² The number of Internet users in China grew from 620,000 in 1997 to 8.9 million in 2000.³

Fast-forward to 2018. On November 11, 2018, Alibaba, China’s largest e-commerce company, kicked off Singles Day shopping festival, a Chinese version of the American black Friday, with a four-hour gala. “Double 11”—a play on how the number 1 represents being single and unmarried—was reinvented by Alibaba as a shopping event for young consumers. The event in past years has featured many international stars, such as Kevin Spacey, Adam Lambert, Daniel Craig, Miranda Kerr, and numerous Chinese celebrities. Throughout the performances, promotional activities—drawings for free items and gift money, and discounts on various products—were used to stimulate the audience’s purchasing desire. The gross merchandise value of the 2018 shopping day hit a record high of $30.8 billion in sales.⁴

In a little over two decades, the Internet in China has become a gigantic platform for communication, mobilization, and commercialization. Tracing China’s Internet from its birth through its major stages of growth will help to understand how.

A brief conceptual discussion will be useful. Several scholars have written about the history of China’s ICTs and Internet. Milton Muller, Tan Zixiang, and Wu Wei have discussed the early development of the telecom and data network, with the network building efforts primarily from the Chinese government. Some other scholars have interests in the issue of censorship and control. It is no new argument that China’s Internet was censored by the state and self-censored by the service and content providers.⁵ Alongside this discussion is a concern for the democratic potential the Internet might bring to China.⁶ One explanation for the scholarly attention to China’s Internet is that this interest is motivated by the prospect that the Internet could be a democratizing force in a communist regime famously known for censoring media and public opinion.⁷ The seemingly opposite themes of censorship and democracy actually represent two ends of one central assumption that the Internet is just a tool for enlightenment or suppression. Granting that such argument has some validity, it at its best provides an inaccurate and incomplete account of the digital landscape in China and at its worst invites an oversimplification of the complex social interaction and a neglect of the subjectivities of different agencies and institutions in China. The Internet itself does not stand as an “anonymous, decentralized, borderless and interactive” system for “diverse opinions, civic activities or collective actions.”⁸ It is the power relation and social dynamic in a system—be it a capitalist or socialist or a mix—that is decisive for the structure of information and communication technology (ICT).

ICT and Internet sectors are not only communication tools or platforms but also integral aspects of the capitalist system. The ICT industry in China has been oriented, in several ways, toward capitalist development, which this chapter examines. It focuses on the historical and regulatory contexts as they not only informed and institutionalized the system of information provision but also reflected the existing power negotiations that have devised the policies. Communication policies respond, to different extents, to some profound questions concerning “the nature of the media system and how it is structured, and how that might affect the conditions for the informational needs of a democracy.”⁹ More critically, the agendas set by policies are “expressions of dynamic processes and power relations” in a society.¹⁰ In China the party-state is one of the most important, though not the only important, powers in setting forward how the emerging communication system is structured.¹¹ Through the prism of policy discourse, we can better understand the political-economic rationales and how relations between different institutions played out in China’s Internet development, laying foundations for private companies like Tencent.

This chapter first traces the history of the building of network infrastructure and services in China, with special attention paid to questions of when and to what extent domestic private capital was allowed into the Internet industry. The Internet in China developed in four distinct stages, and not long after its birth, China’s Internet was embedded in the country’s capitalist development and global reinsertion through industrialization and informatization. Both as an enabling condition and an outcome, priority was given to building the information network and industry in coastal and urban areas, which contributed to not only the creation of an enormous pool of migrant labor but also to the user base for new Internet services and applications. Throughout, the chapter shows that China’s ICT industry and capitalist investments mutually constituted and facilitated each other’s development under the evolving central government policies, and together industry, investment, and government gave birth to Tencent.

Building a Chinese Internet

The Chinese central government’s policies on Internet development and the efforts in building the information superhighway went through four stages: the preparation, 1987 to 1993; the Internet as infrastructure, 1994 and 1995; the Internet as industrialization, 1996 to 2010; and the Internet as a pillar industry, 2011 to the present. Throughout these processes, capital has been visible, but different units of capital—state-owned units and private ones—were allowed to enter the industry to different extents. In the two early stages, the driving force came primarily from state-owned capital backed by the central government’s informatization policies. Private capital and foreign capital were given more space in the latest two stages, which reflected China’s further opening up and integrating into global capitalism. These stages were also parallel to China’s overall political-economic transformation since the 1980s. In 1978 not only had the central government in China decided to liberalize and open up the domestic economy but it also rediscovered the foundational position of science and technology in boosting economic productivity.¹² The Internet’s second stage of development came along with China’s then top leader Deng Xiaoping’s southern tour to Shenzhen among other southern coastal cities in 1992, during which he affirmed the opening-up policies to further connect with the worldwide market economy and to use foreign capital to facilitate domestic growth.¹³ The third stage broadly correlated with an era when China sought to aggressively reintegrate into global capitalism by using ICTs both as a channel for communication and a vehicle for attracting investments, while more recent developments came under the country’s post-crisis rebalancing.

Preparation: 1987–1993

The first stage was the preparation years between 1987 and 1993, during which policies were focused on encouraging scientific research and popularizing networking technology.¹⁴ This period was marked by two milestones, with primary efforts from the Chinese government-funded science-and-technology research institutes and univer...

Table of contents

• Cover
• Half Title
• Series
• Title
• Copyright
• Dedication
• Contents
• List of Abbreviations
• List of Tables
• List of Figures
• Acknowledgments
• Introduction
• 1 History and Context
• 2 Economic Profile
• 3 Political Profile
• 4 Cultural Profile
• Conclusion
• Bibliography
• Index