Tencent is taking a quiet path through the confusion of Chinese technology

For China’s Big Tech in a bleak year, it has typically been roughly the business of the country’s most valuable technology company and its founder, now China’s second-richest man.

Tencent, a $ 730 million social media and gaming giant, and Pony Ma, its 49-year-old CEO, have avoided significant public censorship at a time when Alibaba, Ant Group and Meituan have had serious questions from regulators in their business and market. power.

Tencent is unlikely to escape unscathed, according to officials who are silencing the case against its music business, but Ma’s low profile and high attention to government relations have put the company in a good position to do business.

“Keeping quiet will help you make money,” two Tencent employees said, referring to the golden rule for Chinese activists known to former Communist Party leader Jiang Zemin.

In contrast, his former rival Jack Ma has hardly been seen in public since regulators last year stopped his Fintech company’s $ 37 billion initial public offering.

“Pony is what the government wants in a technology executive. It has a low profile and is generally in line with the government’s plans,” said a founding technology start-up. “It’s against Jack Ma.”

According to two Tencent-based technology officials in Guangdong province, the group’s music department is likely to be fined this summer after the Communist Party’s 100th anniversary celebrations ended.

Authorities say regulators will impose a fine for antitrust abuses on Tencent Music, a music playback service that accounts for about two-thirds of China’s online music market and was listed in the U.S. in 2018. Tencent denied any possible fine.

Officials added that Tencent is still negotiating behind the scenes, whether it should give up some exclusive music rights to the world’s biggest record labels or sell music apps.

“Tencent will take a penalty. They need to show loyalty and make a nice gesture [for Beijing]. Everything is in the hands of Beijing: the local authorities do not have enough power to help, ”a Guangdong official said.

But while Tencent’s mainstream businesses, video games and WeChat superappers aren’t supposed to face pressure from regulators, although WeChat has become such an important social networking and messaging platform, it’s usually said to be “public utility”.

Over the years, Ma has shown a strong ability to anticipate climate change in the technology sector.

In this year’s Chinese legislature, Ma, who has been a delegate to the National People’s Congress since 2013, called for stricter regulation of Internet business, providing high-level support to the current government campaign.

The company handles numerous censorship and surveillance requests from various branches of government on its messaging platforms.

In January 2020, WeChat censored new keyboard percentages Covid government management. The information obtained has led to arrests and sanctions – especially for the man who was sentenced to prison for calling President Xi Jinping a “steam pan”.

Tencent has developed algorithms to strengthen surveillance capabilities to better censor images. “The government needs WeChat – they rely on each other,” one employee said.

Tencent has also provided cloud computing services to the government as part of its drive to develop China’s “smart cities” and its engineers have worked on applications to support the Covid-19 response.

As other Chinese technology leaders step back from day-to-day management, most notably Zhang Yiming in ByteDance, owner of the TikTok video platform, and Colin Huang in Pinduoduo, an e-commerce group, Ma has her 23rd birthday at the top of Tencent.

Born into a middle-class family on the southern island of Hainan, he began writing code at the university, quickly becoming a “master at creating computer viruses,” according to an authorized book on the history of Tencent by journalist Wu Xiaobo.

“I’m an ordinary computer programmer,” Ma told the Chinese media. “My parents didn’t even expect a fool like me to start a business.”

According to his account, “it’s not very social,” nor “with good words.” He rarely gives interviews or lectures, public appearances, or posts on social media.

But under his leadership, Tencent has increased its revenue 24 times in the last decade, becoming the most active investor in China, funding 160 start-ups last year. The value of investments in public trading was Rmb1.4tn ($ 216 billion) at the end of March, more than a quarter of the market capitalization.

It has taken on Chinese stakes, such as the Meituan food delivery team and Pinduoduo ecommerce juggernaut, and has bought shares abroad in foreign technology and gaming companies such as Snap, Riot Games and Epic Games.

Tencent also invested in a venture capital group the son began Group of China’s top financial officer for Tencent Music.

His prolific dealings have pitted him against antitrust regulators, who in recent months have imposed several fines on the company for not being allowed to buy in the past. Ma said the company is “actively cooperating with regulatory authorities… Among other things, sorting out some of these past investments.”

Elsewhere, Ma pushed Tencent away from overstepping the boundaries of technology and finance. While Jack Ma’s Ant Group became the largest consumer lender in China, Tencent left the tips behind. And just months before Ant Group’s IPO was canceled, Pony Ma resigned as a representative of Tencent’s Tenpay mobile payment platform.

“The basic principles of finance are stability and health. In the short term who lives more lives, not who runs faster, ”Pony Ma said at the 2017 legislative session as regulators looked at financial risk. Ant must face a“ correction ”campaign to shrink his business from Tencent- while testing a consumer credit product similar to a credit card.

Four years ago the biggest public relations challenge between the company came four years ago, when parents and the state media began complaining that Tencent’s gaming business was causing children’s addiction, the campaign led to the government stopping new gaming licenses for almost a year.

People’s Daily published its first critical opinion on Tencent’s gaming business the day after the company announced it would set time limits on child use, making it the first Chinese group to do so, two years before the government edict came to rest in the sector. forced to follow the path.

Since then, Ma has been “very focused and focused on the details” of correcting the problem, and sent him an email address at least twice in the early hours of the morning to give advice and encouragement to the child protection team, a team member said.

Reports by Nian Liu, Yuan Yang, Ryan McMorrow and Sun Yu