For China’s large technology companies, in a hot year, for China’s most valuable technology company and its founder (now the second richest person in China), it has more or less business as usual.
As Alibaba, Ant Group, and Meituan face serious doubts about their businesses and markets from regulators, the $730 billion social network and gaming giant Tencent and its 49-year-old CEO Ma Huateng have avoided major public condemnation.
According to officials who are quietly filing a lawsuit against its music business, Tencent is unlikely to remain unscathed, but Jack Ma’s low-key and close attention to government relations put the company in a good position in the negotiations.
“Keeping silent will help you get rich,” said two Tencent employees, citing the golden rule of Chinese entrepreneurs promoted by former CCP leader Jiang Zemin.
In contrast, since regulators stopped the $37 billion initial public offering of its fintech company Ant Group last year, his outspoken former competitor Jack Ma has barely appeared in public.
“Xiao Ma is the technology executive that the government wants. He is low-key and usually follows the government’s plans,” said a founder of a technology startup. “He is the opposite of Jack Ma.”
According to two science and technology officials in Guangdong Province, where Tencent is headquartered, after celebrating the party’s 100th anniversary, the group’s music department may be fined this summer.
Officials said that regulators may impose fines on Tencent Music’s antitrust abuses. Tencent Music is a music streaming service company that owns about two-thirds of China’s online music market. It was split in 2018 and established in the United States. Listed. Tencent declined to comment on possible fines.
Officials added that Tencent is still struggling behind the scenes to negotiate whether it must abandon part of the exclusive music copyrights with the world’s largest record company or sell music apps.
“Tencent will be punished. They must show their loyalty and make a beautiful gesture [for Beijing]. It all depends on Beijing-local authorities don’t have enough power to help,” said an official in Guangdong.
But Tencent’s core business, video games and super application WeChat have not been pressured by regulators, although WeChat has become an important social media and messaging platform, often referred to as a “utility.”
Over the years, Jack Ma has shown keen awareness of climate change in the technology industry.
At this year’s China’s annual legislative conference, Jack Ma, who has been a deputy to the National People’s Congress since 2013, called for strengthening the supervision of Internet businesses and providing high-level support for the current government movement.
The company handled a large number of requests from various government departments to review and monitor its messaging platform.
In January 2020, WeChat reviewed hundreds of The government’s handling of CovidThe information it provided led to arrests and punishments—especially a man who was sentenced to prison for calling President Xi Jinping a “bun”.
In order to improve monitoring capabilities, Tencent has developed algorithms to better censor images. “The government needs WeChat – they depend on each other,” one employee said.
Tencent also provides cloud computing services to the government. As part of promoting the development of China’s “smart cities”, its engineers are committed to developing applications to help cope with Covid-19.
With other Chinese technology executives withdrawing from day-to-day management, the most notable are Zhang Yiming of the video platform TikTok owner Bytedance and Colin Huang of e-commerce group Pinduoduo, Jack Ma’s 23rd year at Tencent.
According to a power of attorney on Tencent’s history by reporter Wu Xiaobo, he was born in a middle-class family on Hainan Island, started writing code in college, and soon became a “computer virus maker”.
“I am a typical computer programmer,” Ma told the Chinese media. “Even my parents never thought that a nerd like me could start a company.”
In his own words, he is “not very sociable” and not “good at speech.” He rarely accepts interviews or speeches, and rarely makes public appearances or posts on social media.
But under his leadership, Tencent’s revenue has increased by 24 times in the past ten years, becoming China’s most active investor, investing in 160 start-ups last year. As of the end of March, its publicly traded investment value alone reached 1.4 billion yuan (US$216 billion), more than a quarter of its market value.
It has taken stakes in Chinese upstarts such as the food delivery group Meituan and e-commerce giant Pinduoduo. It has also acquired shares in overseas emerging technology and game companies such as Snap, Riot Games and Epic Games.
Tencent also invested in a venture capital group Start with son China’s top financial official who accepted the group’s investment for Tencent Music.
Its prolific transactions also diverged from antitrust regulators, which have fined the company several times in recent months for failing to seek approval for past acquisitions. Jack Ma stated that the company “is actively cooperating with regulatory authorities… including sorting out some of its past investments.”
In other places, Jack Ma guided Tencent away from the boundaries of technology and finance. While Jack Ma’s Ant Group has grown into China’s largest consumer lending institution, Tencent has trailed behind. A few months before Ant Group’s IPO was cancelled, Ma Huateng submitted his resignation as the representative of Tencent’s mobile payment platform Tenpay.
“The core principles of finance are stability and health. This is about who lives longer, not who runs faster in the short term,” Ma Huateng said at the 2017 legislative session, when regulators were reviewing financial risks. Ant Financial is now facing a “reorganization” campaign aimed at reducing its business, and Tencent is testing consumer loan products similar to credit cards.
The company’s biggest public relations challenge to date came four years ago, when parents and the official media began to complain that Tencent’s gaming business had caused children to become addicted. This movement caused the government to suspend the issuance of new gaming licenses for nearly a year.
Within a day of the People’s Daily published its first review article on Tencent’s gaming business, the company announced that it would set a time limit on the use of children, becoming the first Chinese group to do so, more than two years before the government decree was issued. . Force other departments to follow suit.
A member of the team said that since then, Ma has been “very focused and detail-oriented” in solving this problem, and has emailed the child protection team at least twice in the early morning to give advice and encouragement.
Reported by Nian Liu, Yuan Yang, Ryan McMorrow and Sun Yu