2016 Annenberg-Oxford Media Policy Summer Institute participant and PhD student at York University and researcher for Canadian Media Concentration Research Project, Lianrui Jia, is researching Post-WTO Internet policies in China – in particular, how the country is supporting and regulating its telecommunication and Internet industry. In an interview with 2016 CGCS visiting scholar Till Waescher she discusses the growing importance of China’s online companies both domestically and internationally, their ambivalent relationship with the Communist Party, and the prospects of U.S. internet companies’ re-entry into the Chinese market.
Your research focuses on media concentration in general and the political economy of Chinese internet companies in particular. Describe the rise of Tencent, Alibaba, and Baidu in the last five years in terms of revenue, traffic and user numbers. How do these companies fare in comparison with their U.S. counterparts?
Baidu, Alibaba, and Tencent (BAT) are now the biggest three Chinese Internet companies. Due to vertical and horizontal integration these three have become behemoths in their respective areas (Baidu in search, Alibaba in e-commerce, and Tencent in social media and gaming). All three are public companies listed on NASDAQ, and they have generated some pretty staggering numbers. Revenue wise, BAT have achieved, on average, nearly three folds of revenue growth from 2011 to 2015, with Baidu’s revenue growing from 2,303 million to 10,247.6 million (357.8% increase), Alibaba from 3181.9 million to 12,293 million (280.5% increase), and Tencent from 4528 million to 102,863 million RMB (261% increase). Alibaba’s IPO was the world’s biggest at the time it went public in September 2014, valuing at 25 billion. On September 5th, 2016, Tencent became the most valuable company in Asia with a market capitalization of 255 billion, surpassing Alibaba’s 250 billion. Compared to their U.S counterparts Google, Amazon, and Facebook, BAT’s market capitalization is substantially smaller, although they have been slowly catching up amidst the fluctuations.
However, the most notable difference between these Chinese companies and their U.S. counterparts is that Chinese companies derive almost all of their revenue from the domestic market. In other words, Chinese internet companies are not as global as the U.S ones, in terms of revenue distribution, users, or product reach. For example, Google, in 2015, generated 54% of its revenue internationally, and nearly half of Facebook’s revenue (49.9%) comes from markets outside the U.S.
To increase revenue, Chinese companies have begun to expand globally. As CGCS Internet Policy Observatory affiliate Sarah Logan pointed out in a Chinese companies’ investments outside China have faced scrutiny from the public and regulators due to the companies’ close ties to the Communist Party. Do you think public companies such as Baidu and Tencent, whose executives have to answer to international shareholders, can and will change or rethink the nature of their relationship with the Chinese government in order to further grow internationally?
Sarah Logan’s piece is an excellent study into the conundrum that Chinese Internet companies have to face in the course of global expansion: the process is always embedded in and influenced by geopolitics. I do not think companies like Baidu and Tencent will change or rethink their relationship with the Chinese government, at least not in a drastic way. First of all, the home market is too important. Over 90 percent of revenue for Baidu and Tencent comes from mainland China. In their annual report in 2015, Alibaba did not report any international revenue because it was too insignificant. Their dominance in the domestic market hinges upon their experience in dealing with the government for well over a decade, and they will not risk or break it for the sole purpose of gaining a larger foothold in overseas market.
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//How can the internet act as a tool that promotes both democracy and authoritarianism? Elizabeth Stoycheff and Erik C. Nisbet explore this topic in their latest piece from The Conversation.
The irony of internet freedom was on full display shortly after midnight July 16 in Turkey when President Erdogan used FaceTime and independent TV news to call for public resistance against the military coup that aimed to depose him.
In response, thousands of citizens took to the streets and aided the government in beating back the coup. The military plotters had taken over state TV. In this digital age they apparently didn’t realize television was no longer sufficient to ensure control over the message.
This story may appear like a triumphant example of the internet promoting democracy over authoritarianism.
Not so fast.
In recent years, President Erdogan and his Justice & Development (AKP) Party have become increasingly authoritarian. They have cracked down heavily on internet freedom. President Erdogan even once called social media “the worst menace to society.” And, ironically, restoration of these democratic freedoms was one of the stated motivations of the coup initiators.
This duality of the internet, as a tool to promote democracy or authoritarianism, or simultaneously both, is a complex puzzle.
The U.S. State Department has allocated tens of millions of dollars to promote internet freedom, primarily in the area of censorship circumvention. And just this month, the United Nations Human Rights Council passed a resolution declaring internet freedom a fundamental human right. The resolution condemns internet shutdowns by national governments, an act that has become increasingly common in variety of countries across the globe, including Turkey, Brazil, India and Uganda.
On the surface, this policy makes sense. The internet is an intuitive boon for democracy. It provides citizens around the world with greater freedom of expression, opportunities for civil society, education and political participation. And previous research, including our own, has been optimistic about the internet’s democratic potential.
However, this optimism is based on the assumption that citizens who gain internet access use it to expose themselves to new information, engage in political discussions, join social media groups that advocate for worthy causes and read news stories that change their outlook on the world.
And some do.
But others watch Netflix. They use the internet to post selfies to an…
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//In an interview with 2016 CGCS visiting scholar Till Waescher, 2016 Annenberg-Oxford Media Policy Summer Institute participant Halefom Hailu Abraha, deputy director of legal and policy affairs at the Information Network Security Agency (INSA) Ethiopia, discusses the thin line between regulating online content and freedom of expression in a transitional country, the effects of old anti-blasphemy laws for the online realm, and the role of national Internet Service Provider Ethio Telecom.
Ethiopia has the second largest population of all African countries, yet its internet penetration rate is only 12 percent. Still, the country has arguably one of the most sophisticated internet regulatory regimes in the region. 2016 Annenberg-Oxford Media Policy Summer Institute participant Halefom Hailu Abraha is a cyber law and policy researcher, and deputy director of legal and policy affairs at the Information Network Security Agency (INSA), Ethiopia. In an interview with fellow participant and 2016 CGCS visiting scholar Till Waescher, Halefom discusses the thin line between regulating online content and freedom of expression in a transitional country, the effects of old anti-blasphemy laws for the online realm, and the role of national Internet Service Provider Ethio Telecom.
With over 80 ethnic groups and more than 90 languages Ethiopia is the most diversified country on the African continent. What are the biggest challenges when it comes to internet content regulation in your country?
The internet is the greatest tool for advancing causes of democracy and civil liberties. However, it is not without challenges and problems. When it comes to content, the internet provides unlimited access to useful resources, while at the same time, it also serves as a platform for harmful or illegal content such as hate speech, sexually explicit content especially child pornography, defamatory statements, terrorist propaganda, extremist, radicalizing, and racist materials. While recognizing that the benefits of the internet far outweigh its negative…
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//Jahanzaib Haque, current Chief Digital Strategist for the Dawn Media Group, comments on Internet governance in Pakistan including the proposed Prevention of Electronic Crimes Bill.
Pakistan is among the five least connected countries in the world, according to a 2016 World Bank development report titled ‘Digital Dividends.’ Eighty-three per cent of the population of 200 million was found to be offline. The Freedom of the Net report released annually by Freedom House found a host of factors holding Pakistan back. The report stated that, “Low literacy, difficult economic conditions, and cultural resistance have limited the proliferation of ICTs in Pakistan…most remote areas lack broadband, and a large number of users depend on slow dial-up connections or EDGE, an early mobile internet technology.”
While internet penetration is low, the introduction of 3G/4G mobile networks in 2014 has greatly impacted accessibility and speed of adoption. With 3G/4G subscribers climbing to 26.1 million as of February 2016, and total teledensity at 68.54% in the country, the internet is accessible to citizens far beyond the urban areas where it was confined up to 2014. The Pakistan Demographic and Health Survey (PDHS) report showed that mobile phone ownership stood at 94.7% in urban areas and 83% in rural areas, promising far greater opportunities for online access. Growth in internet use is likely to be very rapid over the next few years, closing the wide gap between the haves and the have-nots that…
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