cyber capitalism
Alibaba.com - the largest wholesale website in the world. (Credit: SiriratM/Bigstock.com) (via: bit.ly)

As with many characteristics of China, whether political or economic, the Chinese internet has distinctive features. China’s state-supported e-commerce mega-corporations – notably Alibaba and Tencent – are approaching the size of global giants such as Alphabet and Facebook in terms of market value. By 2017, China’s e-commerce sales were the largest in the world, double those of the United States, the country where the internet was invented and which continues to dominate internet commerce and governance.

In mobile payments, too, China leads the world with a total value in 2017 of $12.77 trillion. Digital connectivity forms an integral part of China’s ambitious Belt and Road Initiative (BRI), formerly called ‘One Belt, One Road’, which has the potential to transform the geo-economic landscape of Asia, the Middle East, Africa, and even Europe. While the outside world has largely focused on the highly regulated and controlled internet in China and how it restricts freedom of speech, this commentary will suggest that it is precisely because it has controlled its cyberspace that China has been able to resist US competition and develop its own versions of Google, Facebook, Twitter, and Amazon, thus demonstrating what I have termed a ‘cyber-capitalism with Chinese characteristics’.

One of the most significant developments in the arena of international communication over the past two decades has been the rise of China as a major economic and communication power.  As the world’s largest country in terms of population and one of its oldest continuing civilisations, China has a significant cultural role in the era of globalisation. The accelerated global growth of China’s media parallels the extraordinary expansion and internationalisation of the Chinese economy in the last two decades. By 2016, China had become the largest importer for more than 70 countries and accounted for about 10% of all imports globally. Chinese companies are becoming increasingly competitive in global markets, making sizeable investments and acquisitions around the world. This is assisted by the inclusion of the Renminbi in the IMF’s special drawing rights, making it one of the world’s reserve currencies. According to the IMF, China’s share of global GDP, in purchasing power terms, has grown from just over 4% in 1990 to nearly 18% in 2016, while that of the G7 countries – the US, Japan, Germany, the UK, France, Canada, and Italy – shrank from nearly 51% in 1990 to about 31% in 2016. Since it joined the WTO in 2001, China’s imports have surged from $243.55 billion to $1.68 trillion in 15 years, an average annual growth of more than 10%.

In the past decade, the country has also emerged as a major cyber power – with attendant socio-cultural, political, economic, and security implications for international communication. China is home to the world’s largest number of internet users – more than 780 million in 2017 – and due to the state’s policy of media control, it has developed a Chinese internet, dominated by the top four internet corporations – Baidu, Alibaba, Tencent, and Sina (referred to by the ‘BATS’ acronym) with their different social media and electronic commerce platforms used daily by hundreds of millions of Chinese consumers. In 2016, Ma Huateng (known as Pony Ma), CEO of Tencent, and Alibaba’s Jack Ma were among the world’s 20 wealthiest people, according to Forbes, with net worths of $45.3 billion and $39 billion respectively. According to Forbes magazine, six of China’s ten wealthiest individuals are founders or top executives of internet-related companies. Baidu, Huawei, Tencent, and Alibaba were listed among the world’s 50 ‘smartest’ companies in 2016 by MIT Technology Review – enterprises which combine innovative technology with effective business models to create new opportunities. These and other such companies are now increasingly going global.

While international debates about the Chinese internet have focused on censorship-related issues, the Chinese government and its increasingly globalising cyber corporations have been strengthening their digital imprints across the world. Beyond the discourses about party-state control, censorship, and surveillance and the ideological narratives that such a system promotes, it could be argued that China has its own version of the internet and what I have characterised as ‘cyber-capitalism with Chinese characteristics’ (Thussu, 2018, p. 26). This can be defined as “giving high priority to cyber sovereignty, creating and sustaining the world’s largest online market for a global Sino-sphere; establishing domestic cyber properties and protecting them from competition from global digital giants by introducing and implementing strict regulatory regimes, and globalisation of Chinese digital corporations. China is the only country with its own version of Google, Facebook, Amazon, Twitter, WhatsApp, and many other essentially US-based digital properties” (Ibid) – see Figure 1:

Communicating ‘cyber capitalism with Chinese characteristics’ 1

In 2011, Tencent launched the Weixin messenger application and, a year later, made available an English version called WeChat to promote the brand internationally. Since then the app has been made accessible in translated versions in major languages, including Spanish, Russian, Portuguese, Turkish, Japanese, Korean, Polish, and Hindi – although the majority of its users are in mainland China.

Unlike its Western counterparts such as Facebook’s WhatsApp, WeChat allows its users not only to make calls and send messages but also to pay bills and enables shopping (including in many overseas stores), ordering goods and services and money transfers. By the end of 2017, WeChat was being used by one billion people, and the market value of this Hong Kong-listed company had reached nearly $535 billion, surpassing that of Facebook and making it the first Asian corporation to break into the $500 billion league.

In 2017, China’s mobile payments totalled $12.77 trillion, the world’s largest in volume, according to Chinese government data. More than 90% of these transactions were through mobile payment apps – Alibaba’s Alipay and Tencent’s TenPay. Tencent is also a very important player in the gaming industry. With 600 million gamers, China dominates the global e-sports market: In 2017 it was the world’s largest market for PC, online, and mobile games. With a market capitalisation in 2017 of $527 billion, the Hangzhou-based Alibaba group is the world’s largest e-commerce company and one of the most valuable global Chinese brands.

Despite having created the world’s largest digital market within China, the cyber corporations of China have had limited success abroad. Attempts made by the search engine Baidu – which tried a Japanese version and made inroads into Egypt and Thailand, among other countries – and the attempt by news portal Sina to launch an English language service in 2013, are two prominent examples of this. Some Chinese corporations have collaborated with major Western companies to assist their globalisation process: Chinese telecommunications giant, Huawei – a privately-owned company – has collaborated with European telecom companies to create a global presence and influence. Huawei has invested heavily in 5G mobile systems, with more than one billion dollars in 5G research, and has tested 5G equipment with leading European telecom operators. In this endeavour it had the support of the Chinese government.

A report by the China Academy of Information and Communications Technology predicted that 5G will drive $946.8 billion of economic output in the country by 2030. China Mobile Communications Corp, the world’s largest telecoms carrier in terms of subscribers, said it aims to deploy more than 10,000 5G base stations by 2020. Xiaomi has invested in start-ups globally in things like video-content providers and mobile-gaming apps, including in countries such as India, where, with local partners, it has introduced localised internet services and content on its smartphones in the country, the world’s second-largest smartphone market. By 2017, Chinese corporations such as Vivo, Lenovo, Xiaomi, and Oppo accounted for nearly half the smartphones in India.

China’s ‘Internet Plus’ strategy, unveiled in 2015, aims to deepen links between the internet and almost all sectors of the Chinese economy, as well as provide government support for Chinese internet corporations in their globalisation – both by providing digital hardware as well as software. Way back in 1997, Youjin Zheng, former director of China’s Center for Information Infrastructure said, “Informatisation is the foundation of China’s economic modernisation; information resources are one of the most basic and important inputs for modern economic development; the information industry should become the fundamental sector of China’s economy”.

Chinese companies are also investing heavily in semiconductors and Artificial Intelligence (AI). By 2018, Alibaba Cloud had many data centres outside China, including in the US, Japan, Australia, Germany, and the UAE. It was ranked fifth in the world in an arena dominated by Microsoft and Amazon. China’s government and its corporations are heavily investing in future-oriented communication technologies including AI, 5G networks, IPv6 protocols, virtual reality (VR), and the Internet of Things (IoT). According to the World Intellectual Property Organization, of the three million patent applications filed worldwide in 2016, China had about 236,600 or 98% of the additional filings, followed by the US with around 16,200 filings. The State Intellectual Property Office of China received 1.3 million patent applications in 2016 – more than the combined total for the United States Patent and Trademark Office (605,571), the Japan Patent Office (318,381), the Korean Intellectual Property Office (208,830), and the European Patent Office (159,358). Together, these top five offices accounted for 84% of the world total in 2016.

This cyber-capitalism aims to reduce China’s industrial and technological dependence upon foreign corporations, while transforming China into a global ICT leader. China’s digital corporations, together with what has been called ‘Chinese informationalism’, represent China’s new developmental paradigm, that is, the rise of network labour in relation to network enterprise on one hand and the network state on the other hand.

Apart from exporting its cyber properties aboard – particularly in the domain of mobile communication – China is also investing in the construction of major communication infrastructure projects. In 2015, Huawei announced that it would construct the Cameroon-Brazil Cable System (CBCS), connecting Africa to Latin America in collaboration with China Unicom and Spain’s Telefónica, and in 2017, that it would construct the Pakistan East Africa Cable Express (PEACE) submarine cable, which will connect South Asia with East Africa and be completed by the end of 2019.

Such intercontinental communication links are part of China’s highly ambitious and largely successful ‘going out’ strategy. The communist party leadership has used an array of strategies to ensure that its viewpoints are visible in the global media-sphere, including television, documentary, and feature film. In 2014, addressing the Central Conference on Work Relating to Foreign Affairs, President Xi Jinping announced that China should “give a good Chinese narrative, and better communicate China’s messages to the world” (quoted in Xinhua, 2014). As part of disseminating this message to the world, the state-funded ‘central media’ – Xinhua News Agency, China Central Television, China Radio International, People’s Daily and the English-language China Daily – were generously funded for global expansion. This funding came as part of a broader government effort to create internationally competitive media conglomerates in China that would make China’s voice heard internationally.

In 2016, CCTV-9, CCTV’s international English news network – set up in 2000 and targeted at developing countries, particularly in Africa – was re-launched as China Global Television Network (CGTN), with the aim to “re-brand our product to the world, to cope with the global trend in media convergence” (Thussu, de Burgh, and Shi, 2017). As the main instrument of Chinese global communication, CGTN – available in French, Spanish, Russian and Arabic – is emphatic about its mission as mentioned on its website: “we cover the whole globe, reporting news from a Chinese perspective. Our mission is to create a better understanding of international events across the world, bridging continents and bringing a more balanced view to global news reporting”. In recent years, Nairobi has emerged as a hub for Chinese media’s presence in Africa with the setting up of the CCTV Africa service in 2012, while StarTimes, one of China’s largest pay-TV companies, has been operating on the continent since 2002, reaching, seven million subscribers across ten countries in 2018 and diversifying to mobile TV services and internet business platforms.

The Xinhua News Agency, too, has expanded its international operations, being particularly strong in the developing world and claiming to articulate a ‘southern’ news agenda. In 2017, China Radio International was broadcasting in 61 languages via its six overseas regional hubs and 32 correspondents and had affiliations with 70 overseas radio stations and 18 global internet radio services. However, massive expansion and technological prowess, as well as the recruitment of international staff, have not translated into professional output: None of the Chinese international media has so far broken a major global story. Despite its globalisation and marketisation the agency is seen by the outside world as little more than the mouthpiece of the Chinese government and the Communist Party. Likewise, Chinese television news has yet to acquire global popularity or even credibility. Chinese media has had limited success in addressing this, partly because of excessive bureaucratisation and overt and covert censorship – often self-censorship – which limits journalistic impact as the editorial policy appears to follow a bland approach.

More successful have been privately funded Chinese media conglomerates, which, although following state strictures, are better able to manoeuver around China’s highly regulated media system. The Chinese authorities have recognised that officially sponsored news media are less effective in ‘winning hearts and minds’ and instead the strategy has become to focus on entertainment media, in collaboration with private domestic and transnational content providers. One way of doing this is to encourage major Chinese companies to acquire entertainment properties – both hardware and software – from the West. Disney is collaborating with China’s Ministry of Culture to help develop the country’s animation industry, and with Shanghai Media Group – one of China’s largest media corporations – to make films for global audiences. Despite the strict regulation of foreign film and entertainment programming imports, the global media giants are extremely keen to consolidate their operations within what is one of the world’s largest and fastest growing media markets. Co-production – in state jargon, ‘officially assisted production’ – between Hollywood studios and Chinese companies has become increasingly common: 42 films were co-produced between 2002 and 2013, although this often requires the scripts to be edited so as not to offend the sensibilities of an overly sensitive Chinese government.

Part of the reason for such collaboration is the lack of exportable entertainment within China, although Hong Kong-made ‘action films’ have attracted international audiences since the 1970s, as have internationally recognised Chinese actors like Bruce Lee, Jackie Chan, Maggie Cheung Man-yuk, John Woo, Michelle Yeoh, and Gong Li. The global success of such films as Crouching Tiger, Hidden Dragon (2000), Hero (2002), and House of Flying Daggers (2004) opened up Chinese films to a global audience, helped in no small way by marketing, advertising, and co-production with major Hollywood studios. In recent years, Chinese companies like the Dalian Wanda Group have been investing in movie theatre chains in the US and Europe, as well as in ownership of production companies like Legendary Entertainment. The Dalian Wanda Group is also building the world’s largest film-making facility at a cost of $8.2 billion at Wanda Studios in Qingdao. In 2016, the group and Sony Pictures entered into a strategic alliance to co-finance Sony Pictures’ releases in China.

Wanda Group, together with other Chinese companies, is also investing in sports media – one of the most profitable and global genres, while the Chinese presence in global financial media is also rising: In 2017, a Chinese consortium acquired the US-based International Data Group, a leading global media, market research, and venture company with operations in 97 countries. Chinese media companies are also developing Chinese content, ranging from historical dramas, feature films, game and chat shows, to news and current affairs, potentially for a global audience.

Chinese creative industries have come of age in the last two decades, facilitated by activist state intervention and the development of a ‘creative economy’. Such expansion has been made possible by the information and communication infrastructure put in place over the past decade by Chinese-government supported projects. Creating information and communication networks are an integral part of the Belt and Road Initiative (BRI), outlined in 2015 by China’s National Development and Reform Commission When completed, the BRI will have 900 infrastructure projects, valued at about $1.3 trillion, forming an economic ‘belt’ across the Eurasian continent and a maritime ‘silk road’ through Southeast and South Asia to the Middle East ‘to deepen economic integration and connectivity’. Winning the hearts and minds of foreign populations along these routes is a key component of China’s soft power discourses, which have employed the globalising communication strategies developed in recent years as part of China’s ‘going out’ policy.

While such connectivity is creating new social formations among Chinese citizens, based on shared interests in entertainment, it has also been used by government authorities to monitor and censor communication. Concerns persist about cyber censorship in what remains a one-party state with an increasingly sophisticated ‘Great Firewall’. Under Xi Jinping’s leadership, censorship regimes have become more pervasive, relying on covert methods. The legitimate focus on censorship issues pertaining to China’s internet is understandable. China has one of the world’s most advanced and sophisticated internet censorship regimes for ‘information management’.

Dealing with large-scale data also raises questions about privacy and the commodification of information, since organisations such as Alibaba and Tencent have extraordinary access to information – Alipay introduced a facial recognition payment service in 2017. The notion of ‘cyber-sovereignty’, it is suggested, is different from the US-centric, market-oriented internet governance scheme. Lu Wei, China’s internet chief, has suggested that China wants to follow a path of “cyber-governance with Chinese characteristics” (Denyer, 2016). This will involve combined efforts from the Chinese government China’s fast-growing internet-based corporations, which increasingly operate at a transnational level. As more Chinese tourists, students, and business people travel abroad, services such as Alibaba and WeChat are being increasingly globalised.

Given that in 2018 about 40% of China’s population was not yet online, the potential for the Chinese internet to grow further and, with it, cyber capitalism to expand, is enormous. This has been recognised by Western-based corporations, such as Google, which withdrew from Chinese operations in 2010 but is now seeking to get back into the market through partnerships and collaborations. Sundar Pichai, Google’s CEO, announced investment of $550 million in JD.com – one of China’s biggest e-commerce companies – at the China Development Forum in Beijing on 18 June 2018. And while Facebook has been blocked in the mainland since 2009, Mark Zuckerberg’s visit in 2016 indicated their interest in re-establishing a presence in China, currently limited to a partnership with Xiaomi, a supplier of virtual reality headsets for its Oculus platform.

The digital duel that the rise of the Chinese internet will precipitate is likely to shape global debates about cyber governance, e-commerce, and communication. The Chinese version of cyber-capitalism discussed above may globalise further and create a new model for the internet that is radically different from its US precursor.

 

Daya Thussu

Professor of International Communication and Co-Director of the India Media Centre at the University of Westminster in London

 

References

Denyer, S. (2016). China’s scary lesson to the world: Censoring the internet works. Washington Post. Retrieved from https://www.washingtonpost.com/world/asia_pacific/chinas-scary-lesson-to-the-world-censoring-the-internet-works/2016/05/23/413afe78-fff3-11e5-8bb1-f124a43f84dc_story.html?noredirect=on&utm_term=.2e9871b11bb6.

Thussu, D. (2018). Globalization of Chinese media: The global context. In D. Thussu, H. de Burgh, and A. Shi (Eds.). China’s Media Go Global. London: Routledge.

Xinhua. (2014). Retrieved from http://www.xinhuanet.com/english/china/2014-11/30/c_133822694_4.htm.

 

 

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Daya Thussu

Professor of International Communication and Co-Director of the India Media Centre at the University of Westminster in London,

Daya Kishan Thussu is Professor of International Communication and Co-Director of India Media Centre at the University of Westminster in London. A PhD in International Relations from Jawaharlal Nehru University, New Delhi, he is the founder and Managing Editor of Global Media and Communication, a journal published by SAGE. He has authored and edited as many as 17 books. Among his key publications are: Mapping BRICS Media (co-edited with Kaarle Nordenstreng, 2015); Media and Terrorism: Global Perspectives (co-edited with Des Freedman, 2012); Internationalizing Media Studies (2009); News as Entertainment: The Rise of Global Infotainment (2007); Media on the Move: Global Flow and Contra-Flow (2007); International Communication: Continuity and Change, third edition (forthcoming); and Electronic Empires: Global Media and Local Resistance (1998). In 2014, he was honored with a “Distinguished Scholar Award” by the International Studies Association, a first for a non-Western scholar in the field of International Communication.