Will China Dominate Global Technology?

Chinese-based technology sits behind some of the world’s most powerful companies – Baidu, Alibaba, WeChat, and Tencent, the subject of a new book. That has created immense wealth for a few bold entrepreneurs, but new policies by the Chinese government aim to reduce that wealth inequality.

Beyond the “great firewall” – the figurative wall separating the internet within China from the internet outside it, which enables China’s censorship of communications within it – lies a gigantic advanced digital civilization, as large as the one in most of the rest of the world, yet almost completely unknown to it. It is composed of an ecosystem of companies both large and small, the largest of which compete in size with Apple, Microsoft, Amazon, Alphabet, and Meta. One of the largest is the enormous conglomerate known as Tencent.

Lulu Chen’s book about Tencent, Influence Empire: The Story of Tencent and China’s Tech Ambition, was among five books shortlisted by the Financial Times as the best business book of 2022. Lulu (Chinese name Yilun Chen), a long-time reporter on China for Bloomberg News and Bloomberg Businessweek, shared her insights with me via an interview recently.

The not-so-impermeable wall

Companies in China are to a Westerner very foreign, with names in characters that are inscrutable to us. And they are behind that firewall, so they have little interaction with the companies and the internet that we know.

Nevertheless, that wall – not the great firewall itself but the wall separating Chinese companies and their entrepreneurial activities from those in the West, in Silicon Valley for example – is much more permeable than we imagine.

Personnel can migrate from Silicon Valley to Chinese companies, sometimes bringing Silicon Valley financial backing, almost as easily as they would from one Silicon Valley company to another. This facilitates the copying of business models, strategies and products (as it does in Silicon Valley too) – and copies were indeed what many of the large Chinese internet-based companies originally were: Baidu of Google; Weibo of Twitter; Alibaba originally of eBay (though now it more resembles Amazon). Tencent itself, as Chen says, “merges the functions of WhatsApp, PayPal, Facebook, Uber, Deliveroo, Yahoo, TikTok into one super-app known as WeChat.”