The Independent Uganda: You get the Truth we Pay the Price
China is a global tech player at par with the United States or Western Europe with its own rules and regulations
| JOHN PAUL RUGABA | It’s September 12, 2018 and I have just landed in China. Apart from the breath taking scenery, new language and culture, I notice something quite unusual with my social media applications. I cannot access Facebook, WhatsApp, or Instagram despite an efficient WIFI connection.
Prior to my entry to China, I knew the Chinese tech industry from an African or rather Ugandan perspective. I arrived at a time, when Huawei was on the rise both in the mobile phone and equipment sector ( locally and internationally), Transsion holdings (Tecno, Infinix, Itel) had set a foothold on the African market and StarTimes digital was a major player in the digital television industry.
Fast forward to inside the country and the vast new reality that kicks in is that China is a global tech player at par with the United States or Western Europe. It has its own rules and regulations.
To understand the Chinese tech industry, the city of Shenzhen is the perfect starting point. What was once a shipping village in 1980 has risen to become China’s version of silicon valley. Shenzhen is home to China’s biggest startups such as Baidu, Tencent, Alibaba, Huawei and DJI. All these companies have set a foothold in the international market in their respective sectors.
What started as a government project of a free economic zone in the 1980s in the re-opening era of China’s economy, ended up in a tech haven that’s attracting foreign talent from all over the world. In summary, the Shenzhen tech miracle is the story of China’s tech industry; of a favorable government policy of attracting foreign investment and then supporting the rise of local startups all backed up by an extensive domestic market and good infrastructure.
However recently, the Chinese government has started a crackdown on the tech industry in China; a move that may be seen to echo the anti-monopoly crackdown in the U.S. Firms like TenCent and Alibaba have been heavily fined with the government also introducing new policies that directly affect the big tech in China. The introduction of the digital yuan ( the Chinese government’s e-wallet system) into the market which is a direct competitor to WeChat pay (TenCent) and Alipay (Alibaba) and the denial of ANT group of launching the worlds largest IPO is an example of how new policies are affecting big tech in China.
Regardless, an insight into China’s tech miracle is incomplete without highlighting the success stories, its characteristics, and the current state of affairs.
The Chinese tech success stories
Baidu, Alibaba , TenCent , Huawei, Xiaomi , Bytedance (Tiktok), Lenovo and the BMK group ( oppo, Vivo,Oneplus, Realme/Redmi ) are one of the most known successful Chinese tech brands. These tech brands have gone on to create tech products that have dominated not only the local Chinese market but also the international market. These companies have been assisted by the Chinese government policy of supporting local firms either through subsidies or favourable government policy that tries to limit the power of foreign firms in the country. Majority of the pioneers of these firms might have benefited from the government policy of the 1980s and 1990s that required foreign firms to hire Chinese in the technical sectors; thus leading to a generation of technically equipped Chinese personnel.
To highlight a few tech firms, we start with Huawei. It’s the worlds largest mobile equipment company and in a brief period in 2021, the worlds largest smartphone company. The company has been at the forefront of the 5G technological revolution globally and its P phone series were once of the best selling phones prior to the Trump administration trade bans. The Trump administration restrictions limited the company’s access to vital international components and software thus seriously affecting its market share that has now dropped to less than 4% globally. The fact that Huawei owns over 1000 patents shows that they have a role to play in the innovation of the global tech sector.
Then onto TenCent; the world largest gaming company and one of the largest companies with a vast number of acquisitions. WeChat one of its platforms, with a global active user base of over 1 billion, is an impressive product. WeChat an app that is primarily designed for communication, has morphed into a super app or an operating system with an app. The app enables payments, booking flights and accommodation, and post and view videos just like YouTube, viewing news and alerts, view and scan health codes. It has TenCent applications such as TenCent meeting and QQmusi.
The other remarkable tech firms such as Xiaomi, the Bmk group have grown in market share with them introducing new and improved versions of technology every year.
Transsion holdings (Tecno, itel and infinix) is a Chinese firm that primarily decided to focus on the developing markets and has since set a foothold there. Transsion is leading the smartphone market in sub-Saharan Africa only second to Samsung mobile.
Bytedance- owned by Tiktok has become the fastest growing app per downloads on major app stores and is very popular among the millennial population. Therefore in conclusion, the global tech industry is somewhat largely influenced by Chinese tech firms and innovation.
The great Chinese firewall
It’s 2006, and there is great fanfare at the entry of Google into the world’s largest consumer market. But ironically, four years later in 2010, the company was all but banned in the country. Apart from Google, other western firms such as meta (Facebook, WhatsApp, Instagram) , twitter, YouTube, and Uber are inaccessible in the country. The big question is why the Chinese government chose this approach in the first place.
First and foremost, it’s national security. The Chinese government believes that the international tech firms are a threat to national security since they collect lots consumer data of its citizens and store it in far away foreign servers. This is a true notion especially with the recent privacy concerns of major tech companies such as Google and Facebook. The Chinese government wants all Chinese consumer data held within China, and with most firms finding it hard to abide by that, it explains why some were expelled or denied entry into the Chinese market. The firms that make it in the Chinese market such as Microsoft and Apple have to make concessions to the Chinese government such as Apple not allowing banned apps from appearing in its app store. Secondly it’s nationalism and the need to protect local industry. Beijing believes that the competition that will arise between foreign tech and the upcoming tech firms could eventually lead to the collapse of the local firms . This policy also plays in the governments push to promote a nationalistic/patriotic sentiment in the country, by fronting the various local tech firms as a source of national pride. Henceforth all this add up to the Chinese tech firewall.
Conclusion
Since the turn of the century, China has played a big role in the tech industry through its innovation and the global outreach of its tech firms. The Chinese firewall; a defining characteristic of the Chinese tech industry, is a model that if properly used and a few changes are added to it, is a perfect model developing nations could implement. It protects upcoming local tech firms thus encouraging innovation and protects national consumer data. In a world, where the shift to the 4th industrial revolution (artificial intelligence and internet of things) is becoming mainstream, many nations such as the developing nations, should prioritise the tech sector, just like the Chinese Communist party did.
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John Paul Rugaba is a Research fellow at Development Watch Centre
