Populism and the shifting Climate Change Debate

In the United States, there is a shift in political dialogue in response to the growing concerns regarding anthropogenic climate change. Although public awareness of climate change is growing each year, we still see strong polarization between climate skeptics and climate activists. There are now three main groups leading the climate debate, but the first signs of convergence among these groups are appearing.

Observations

  • On March 12th, President Trump posted a tweet in which he quotes another skeptical view of anthropogenic climate change by discrediting the scientific consensus on humanity’s impact on the changing climate.
  • In spite of skepticism about humanity’s impact on climate change, studies have shown that 97% of scientists have reached a consensus that climate-warming trends are extremely likely due to human activities. However, to support Trump’s climate-skeptic standpoint, the White House has been recruiting climate-skeptic scientists such as William Happer and Steve Koonin for the Presidential Committee on Climate Security.
  • Trump’s political strategy has often been characterized as populist. Populism is a political approach which usually emerges as a response to periods of crisis or uncertainty on an economic or cultural level. Ideologically, populism often considers society to be separated into two homogenous and antagonistic camps: the “good” people and the “corrupt” elite.
  • A Democratic response to climate change is taking shape. Alexandria Ocasio-Cortez, a Democratic member of the U.S. House of Representatives, has issued a resolution revolving active measures to combat anthropogenic climate change named the Green New Deal. The discussion around the Green New Deal shows that the prominence of climate change on the political agenda has grown. This will play a vital role in the upcoming 2020 presidential elections.
  • More Americans than ever believe in anthropogenic climate change: A recent poll by the Yale Program on Climate Change Communication shows that about six in ten Americans believe that climate change occurs largely due to human activities. Moreover, only one in four Americans believe that climate change occurs only through natural changes.
  • Concerns regarding anthropogenic climate change have found its way into the U.S. courts. For instance, in the “Juliana” case, a group of young plaintiffs argues that with current climate change-related policies, the United States government is violating the constitution. The plaintiffs state that: “by failing to stabilize atmospheric carbon levels, the federal government has failed to protect constitutional rights”.
  • Republicans are increasingly acknowledging anthropogenic climate change and proposing political measures. For instance, George Schultz and James Baker, two former Republican Secretaries of State, have proposed a gradual increase in carbon tax, the revenues of which would be returned to the United States. Indeed, opposition to climate skepticism doesn’t only come from Democrats, but also from within the Republican party.

Analysis

With an eye on the 2020 presidential elections in which climate change will become a major topic, three different political groups are emerging. First, there is the climate-skeptic group represented by Donald Trump. His political stance towards climate change is embedded within his populist rhetoric, in which he creates a juxtaposition between the elite in Washington and the American people. Trump argues that the leftist political elites have intentionally subordinated the will of the people to benefit their own political agenda; a view shared by many in respect to the Yellow Vest movement in France. In fact, Trump won the presidential election by advocating the belief that economic hardships persisted due to policies by the political elite. To show that he was taking measures to restore economic growth for his voters, Trump identified Obama-era legislation as a symbolic culprit and either revoked or delayed several Obama initiatives (e.g. the Affordable Care Act, changes in the Clean Water Act, measures by the Environmental Protection Agency to combat air pollution). The same symbolism can be seen in Trump’s consistent campaign to fund the border wall with Mexico. Trump’s stance toward climate change is an extension of his anti-establishment political rhetoric and the symbolism that is embedded in this type of politics, namely the struggle against a corrupt elite for the benefit of the American people. By discrediting scientific consensus by claiming these scientists have a leftist political agenda, Trump may once again succeed in convincing his constituency that the discussion on climate change exists to extract more wealth from the American people. All in all, the staying power of his populist climate skepticism should not be underestimated.

Indeed, the Green New Deal is a new type of populist rhetoric

The second political group that can be identified in the discussion is the progressive Democratic group. During the 2016 presidential campaign, this group was unable to provide an adequate response to Trump’s populist rhetoric. However, with proposed legislature such as the Green New Deal by Alexandria Ocasio-Cortez, this group is formulating a response to Trump’s rhetoric by adopting an alternative populist rhetoric. We have defined populism as a political approach which emerges in or after a time of uncertainty and which creates clear-cut division between the people and an elite. Whereas Trump’s climate-skeptic rhetoric is aimed at the fears many Americans have of economic hardship, the Democratic plan for climate change presents a grand vision that addresses the same concerns by offering more opportunities in a new “sustainable economy”. Even with the selection of its name, the Green New Deal harkens back to the days of Franklin D. Roosevelt’s (FDR) New Deal, instilling in voters a sense of nostalgia similar to what Trump achieved with his slogan “Make America Great Again”. Indeed, the Green New Deal is a new type of populist rhetoric. It argues that political elites who fail to address humanity’s impact on climate change are opposing the future benefit of the United States people. We can see this viewpoint reflected in the Juliana versus the United States legal case.

The increasing polarization between these two political groups, the right-wing populists on the one hand and the left-wing populists on the other, would initially appear to leave little room for a middle ground. Yet with the growing belief of anthropogenic climate change among the American people, many Republicans have revised their own stance on anthropogenic climate change. Around 55% of liberal/moderate Republicans now believe in anthropogenic climate change, which is an increase of 14% compared to October 2017. Indeed, the majority of the Republican party does not share Trump’s climate-skeptic views (only 26% of conservative Republicans do). In spite of these numbers, Republicans greatly oppose the Green New Deal proposal due to the fact that it implies a government intervention. Though there may not be a Republican alternative to the Green New Deal as of yet, the fact that Republicans now acknowledge the gravity of climate change and increasingly accept the scientific truth of humanity’s impact on the climate, increases the likelihood that Republicans will support something akin to the Green New Deal. What is certain is that during the 2020 elections, climate change will be a major topic.

If something along the lines of the Green New Deal was implemented, this could have major economic consequences. It is beyond doubt that a huge socio-economic project such as the Green New Deal would be highly expensive. The populist rhetoric of the Green New Deal is apparent as Ocasio-Cortez argues that it will only succeed if there is broad active participation by the country as a whole, so-called: “national mobilization”. In addition, Ocasio-Cortez argues that in the long run, economic growth would pay for the entire project, rather than increased taxes. However, economists are divided regarding the plan’s feasibility. On the one hand, economists argue that these kinds of programs would add trillions of dollars to the nation’s debt. Others claim that these engineered spending programs are a less efficient way of reaching sustainability goals than the further development of new clean technology. Indeed, economists argue that the cost of renewable energy is plummeting and sustainable innovations are not driven by a top-down government approach, but instead by the market’s own forces. Furthermore, economists point to the impact of sustainable infrastructure on the American economy: besides an increase of electric vehicle adoption, part of the plan could also affect the aviation market, which could potentially lead to a loss of 10 million jobs in this sector alone. From this perspective, it is unlikely that the Green New Deal will pass Congress in its current form. However, as bipartisan support for climate action is growing, a new type of Green New Deal could emerge in the next few years, following a trajectory similar to FDR’s New Deal.

Implications

  • Because the Green New Deal is a type of populism, the climate debate in the U.S. could result in a new type of backlash, similar to the Yellow Vests movement in France. Another option would be that both political parties succumb to some form of climate fatalism, due to the perception that most action is futile. However, in spite of the fact that politically there only appears to be polarization between the Democratic and Republican Party, climate change could become a theme on which Republicans and Democrats can unite, just as FDR’s New Deal was at the time.
  • Although a state program such as the Green New Deal would have rigorous effects on the American economy, so far, there is no clear consensus among economists as to whether the Green New Deal would be feasible. As the Green New Deal is intentionally vague, there is room for interpretation and speculation, yet similarly to many populist resolutions, there is no clear policy to back it up.
  • In Western-European Countries we see a similar three-group structure. Here far-right populist parties such as the Alternative for Germany (AfD), Britain’s UKIP, the Freedom Party of Austria (FPÖ) and the Dutch Forum for Democracy (FVD) share Trump’s climate sceptic standpoint, yet they do not share his political power. On the other side of the political spectrum, the German Green Party has the highest membership since its conception and Green Left (Groenlinks) in the Netherlands has become the largest party in the political opposition. These green parties advocate extensive socio-economic change in order to build a sustainable economy for future generations, which therefore shares the populist characteristics of the Green New Deal. However contrary to the United States, in European politics we can already identify a moderate alternative to the green party initiatives in the 2015 Paris Climate Agreement.

The implementation of 5G is important for the upgrade of Alibaba & Tencent’s services

5G is the next generation of ultra-fast wireless technology, offering faster data rates, reduced latency, energy savings, cost reductions, higher system capacity, and massive device connectivity. It is expected to power industrial applications such as smarty city infrastructure and the industrial internet, but can also impact consumer services. For example, 5G will enable Tencent’s gamers to seamlessly stream PC and console-quality games on their smartphones without sacrificing processing power or battery life. For Alibaba’s short-video platform Youku, a 5G connection would mean that users can send high-resolution 4K video within a few seconds.

In fear of dependency on Western hardware, Alibaba has set up a semiconductor division

Resembling the States’concern, both Ma’s have outspoken their fear of western depencency when it comes to core technologies:

Alibaba’s Ma:

If we do not master the core technologies, we will be building roofs on other people’s walls and planting vegetables in other people’s yards.

Tencent’s Ma:

[China]’s digital economy will be a high-rise built on sand and hard to sustain if we don’t continue to work hard on basic research and key knowledge, not to mention the transformation from old to new forms of drivers or high-quality development.

In reaction, Alibaba’s R&D arm DAMO (Academy for Discovery, Adventure, Momentum, and Outlook) has set up its own semiconductor manufacturing business and unveiled its chip in July 2019. The chip is designed to process AI tasks such as image, video and voice analysis and will be used for tasks such as autonomous driving, smart cities and smart logistics.

 

Listen to this podcast for more information about 5G in China:

The implementation of 5G is important for the upgrade of Alibaba & Tencent’s services

5G is the next generation of ultra-fast wireless technology, offering faster data rates, reduced latency, energy savings, cost reductions, higher system capacity, and massive device connectivity. It is expected to power industrial applications such as smart city infrastructure and the industrial internet, but it can also impact consumer services. For example, 5G will enable Tencent’s gamers to seamlessly stream PC and console-quality games on their smartphones without sacrificing processing power or battery life. For Alibaba’s short-video platform Youku, a 5G connection would mean that users can send high-resolution 4K video within a few seconds.

In fear of dependency on Western hardware, Alibaba has set up a semiconductor division

Similar to the state’s concerns, Tencent’s and Alibaba’s Ma’s have expressed their fear of western dependency when it comes to core technologies.

“If we do not master the core technologies, we will be building roofs on other people’s walls and planting vegetables in other people’s yards.”
– Jack Ma (CEO Alibaba)

“China’s digital economy will be a high-rise built on sand and hard to sustain if we don’t continue to work hard on basic research and key knowledge, not to mention the transformation from old to new forms of drivers or high-quality development.”
– Pony Ma (CEO Tencent)

In reaction, Alibaba’s R&D arm DAMO (Academy for Discovery, Adventure, Momentum, and Outlook) has set up its own semiconductor manufacturing business and unveiled its chip in July 2019. The chip is designed to process AI tasks such as image, video and voice analysis and will be used for tasks such as autonomous driving, smart cities and smart logistics.

Alibaba and Tencent and Censorship

Within their services and products, Tencent and Alibaba help the government by censoring keywords deemed politically sensitive, while in-house censors also delete posts and accounts. Tencent is quite active in censoring, as the company scored a zero out of 100 for WeChat’s lack of freedom of speech protection and lack of end-to-end encryption in a 2016 Amnesty International report on user privacy.

Alibaba and Tencent have high hopes for the cloud

For Tencent and Alibaba, the cloud started as a crucial component of their internal economy. Over the past few years they have branched out, offering their in-house products to businesses.
Today, Alibaba dominates cloud computing in China with a 43% market share. Under Jack Ma, Alibaba made cloud computing a key priority, and CEO Daniel Zhang plans to make cloud computing technologies an even bigger part of Alibaba’s corporate focus over the next couple of years (for more information see Alibaba’s company profile).
Tencent’s cloud business is the second largest in China, with an 11% market share, according to industry researcher IDC. The company entered the ‘cloud-game’ relatively late, and recently announced to spur its push in cloud computing by investing billions of dollars. This move can be seen as part of its overall strategy to shift focus from its consumer-faced business to the industrial internet. Its cloud-computing business should cater to industries such as retail, mobility, healthcare, and education.

Alibaba and Tencent are members of the National AI Team

Starting in 2017, the Chinese government recruited Alibaba, Tencent, Baidu and iFlyTek to lead key projects in the development of next-generation AI technologies. Alibaba’s cloud computing division was tasked with a smart city project to improve urban life (see Smart Habitat layer for more details), while Tencent has been designated to become a leader in AI-assisted medical diagnosis.
Government endorsement helped Tencent to launch its AI Medical Innovation System, an AI-powered diagnostic medical imaging service. The technology currently has accuracy rates of over 90% for preliminary diagnoses of esophageal cancer, 95% for lung sarcoidosis, and 97% for diabetic retinopathy. Several of Tencent’s AI departments, such as the AI Lab and Tencent Youtu Lab, collaborated to develop the image recognition, using the over 1 billion images on the company’s social network. After the success in healthcare, Tencent is looking to apply its AI knowledge to other applications, such as transportation solutions, security, and protection, as well as voice recognition.

In this episode of the ChinaEconTalk podcast, China expert Jeff Ding of the Future of Humanity Institute discusses the detour Tencent is making from the national champion designation [12:18-13:35]:

Alibaba and Tencent are working on the city of the future…

ET City Brain
The Chinese government designated Alibaba with the task of applying innovative technology to improve urban life. This resonated in Alibaba’s cloud-powered and AI-driven urban project “ET City Brain,” which aims to use AI to optimize city-services in real-time. One of Alibaba’s first pilots focused on reducing traffic congestion in Hangzhou. The video below shows how innovations within several layers of the Stack (think of Cloud Computing, Facial Recognition, and AI) are merged to improve traffic speed up to 11%.

PATH
A joint effort in the smart city area is PATH (Ping An, Alibaba, Tencent, Huawei), a smart city initiative in which these four Chinese tech giants apply their core technologies and an investment of 50M RMB in order to propel China into the global smart cities race (and of course to counter some major problems such as air pollution and congestion).

…but rural areas are also a key priority for Alibaba and Tencent

While smart digital applications are often first rolled out in #tier 1 or 2 cities, both Alibaba and Tencent are currently working on a Rural Strategy. Especially Alibaba sees tier 3, 4 and 5 cities and rural areas as an important new addressable market.
Striking examples are:

•  Tencent-backed WeDoctor and Alibaba’s Good Doctor are making healthcare more accessible for patients in tier 3 and 4 cities.
•  Alibaba invested 716 million USD in Huitongda Network, a platform that offers a variety of business models to help offline stores sell goods via e-commerce offerings, and also help online retailers sell directly to rural residents.
•  Alibaba launched Rural Taobao in 2014, allowing rural residents to buy and sell items online through the company’s Taobao online marketplace. Since its creation, Rural Taobao has expanded steadily, growing to cover 29 provinces, more than 700 counties, and over 30,000 villages.
•  Juhuasuan is Alibaba’s group-buying and flash-sale platform and will be repositioned as an online marketplace for consumers in tier-4, tier-5 cities and rural areas.

“China is experiencing an ongoing consumption upgrade as people look for different ways to enhance their lifestyle. (…) We are now seeing more and more consumers in China’s less-developed regions becoming sophisticated shoppers. They are demanding the same high-quality products as those in top-tier cities.”

– Jiang Fan, President of Tmall and Taobao

Tencent and Alibaba aim for a friction-free consumer interaction through voice

Both Alibaba and Tencent are investing in new consumer interfaces. For example, they are discovering the power of voice as an interface, and more specifically the smart speaker;

Alibaba’s voice assistant is called Tmall Genie. The device is on the market as a regular speaker since 2017 but is also available as a mirror (Tmall Genie Queen) as a device in connected cars (Tmall Genie Auto), and with a built-in monitor (Tmall Genie Family).

The Voice Assistant will become an increasingly important player in our life. I believe that in the coming decade, it will be connected with more devices and be the point of connection for different scenarios in our life, using voice commands to control our homes, vehicles and our personal devices.”

– Miffy CHEN, General Manager, Alibaba AI Labs

Two years after Alibaba, Tencent launched its smart speaker Xiaowei. The launch of Xiaowei is seen as a move of Tencent into diversifying its products and services into more business and industries (such as the B2B and IoT market). Besides, Xiaowei (in English ‘WeChat italking’) will link WeChat users with Tencent’s services available through QQ and WeChat.

Tencent and Alibaba are investing in facial recognition technology

Based on the number of facial recognition patents, Tencent is more active in the field of face recognition than Alibaba. Nevertheless, both companies have already implemented facial recognition in real-life situations.
Tencent is working closely with government in implementing facial recognition. For example, some provinces are issuing electronic identification cards for their citizens using WeChat’s facial recognition technology. The mobile IDs can be used for authentication instead of carrying physical ID cards – mandatory for citizens at all times in China – for travel booking, real name registration at internet cafés, and other security checks. Furthermore, amid tighter scrutiny by the Chinese government, Tencent uses facial recognition to detect minors in relation to concerns that excessive video gaming is damaging public health.

In 2017, Alipay unveiled its facial recognition payment service ‘Smile to Pay.’ The company says that as facial recognition technology takes the place of QR codes, “paying by smiling” will most likely experience explosive growth over the next three years. Statistics from Alibaba during 2018’s shopping festival around singles day also suggest that payments through the face and fingerprint scans now make up 60% of all transactions.

Alibaba’s Smile To Pay system in KFC:

Alibaba and Tencent are developing their own social credit systems

The best-known private system is Sesame Credit, developed by Ant Financial, an affiliate of Alibaba. Sesame Credit is a scoring system that generates individual credit scores for consumers by tapping into Alibaba Group and Ant Financial’s vast online ecosystem and other personal credit information sources. Sesame Scores, which range from 350 to 950 points, are calculated based on five factors – credit history, behavioral preference, fulfillment capability, personal attributes and social network – and are indicators of the users’ creditworthiness. Although the system’s focus is on creditworthiness, a low score can have an impact beyond loans (e.g. being banned from certain hotels) and a government blacklist has also been integrated. At the same time, a high score gives members the possibility to relax in special lounges at China’s train stations or to use bike sharing platforms HelloBike and Ofo deposit free.

Listen to this NPR podcast on the rollout of a Chinese Social Credit System and the role of Alibaba in it:

Tencent is also testing a credit scoring feature for WeChat Pay. Similar to Alibaba’s Sesame Credit, its score is calculated based on WeChat Pay’s pool of data, particularly on personal consumption behaviour. According to Tencent, the purpose is to “provide services that make people’s lives simpler and more convenient.” Users with high scores will be rewarded with perks such as waiving of deposits for rental services and hotels, and paying for services and goods after delivery.

Tencent and Alibaba contribute to the State’s innovation goals

Although Tencent and Alibaba are originally consumer-focused companies, they are expanding their businesses to the ‘industrial internet’, which involves the broader adoption of advanced consumer and industrial applications that take advantage of next-generation technologies for business purposes.

For instance, Tencent is teaming up with Huawei Technologies, a Chinese multinational technology company that provides telecommunications equipment and sells consumer electronics, to accelerate innovation in core technologies, such as AI and cloud computing.

Meanwhile, last year Alibaba’s CEO Jack Ma called for Chinese traditional manufacturers to fully embrace what he called the “New Manufacturing” model. New Manufacturing involves a transformation of traditional manufacturing industry by integrating technology capabilities in the internet, data, AI, cloud computing and IOT. “Proposing the New Manufacturing model is not because Alibaba plans to enter the manufacturing industry, but rather to help manufacturing companies to innovate and upgrade,” Ma said during the 2018 Cloud Computing Conference in Hangzhou. “During this shift, the current manufacturer-oriented industry will transition to a new era led by customers, where small and medium-sized enterprises can benefit the most.”’

Incubators
Furthermore, both Alibaba and Tencent invest heavily in startups and support emerging companies with incubator programs. Tencent’s WeStart for example operates innovation spaces where it offers start-ups office space to rent and incentives such as tax exemption for three years and favorably-priced access to Tencent’s products and infrastructure. Furthermore, the company assists start-ups to target government-backed support programs. Meanwhile, Alibaba’s Cloud division teamed up with the U.S. workspace operator WeWork to develop an incubation program for 20 foreign startups to enter China, and assist 30 Chinese companies to expand overseas.

Alibaba and Tencent investments in electric vehicles

Alibaba, Tencent and several other Chinese companies have joined efforts to meet China’s ambitions concerning green growth of the automotive industry. They have setup car-sharing services T3, which is powered by renewable energy, called T3.

Other examples of investments in the green future of this industry are Alibaba’s leading role in the 2.2B RMB funding round in Xiaopeng Motors, a Chinese electric car maker that aims to speed up the development of electric vehicles. Alibaba elaborates on this investment: “As a clean energy vehicle start-up, the investment in Xiaopeng Motors fits with Alibaba’s strategic focus in the automotive sector. Under our open-platform approach, we will continue to work with a range of automotive manufacturing partners to benefit Chinese consumers”.

Alipay and Wechat transformed China’s Digital payment landscape

China is a country where Visa and Mastercard are (still) banned, and it has an underdeveloped banking system. As a result, Chinese society remained largely cash-based for a long time. Nevertheless, when China started to manufacture cheap mobile phones, Alibaba and Tencent successfully set-up their own mobile payment solutions known as Alipay (by Alibaba) and WeChat Pay (by Tencent).

Users of these payment solutions link their bank cards to the wallet inside the app. Once linked, they are able to use the wallet as a debit card for direct payments in stores or for online purchases. Furthermore, users can transfer money from their bank account to create a balance on the wallet.

The digital solutions provided by Alibaba and Tencent made it extremely easy for consumers to pay with their mobile phone. In 2018, over 85% of purchases made in China were on mobile payment platforms.
In physical shops, merchants offer consumers the opportunity to pay with WeChat Pay and Alipay mostly with QR codes.

Alibaba and Tencent are incorporating the next wave of Chinese entrepreneurs

Established in the late nineties, with founders around 50 years old, Alibaba and Tencent are classic examples of companies that stem from the previous generation. Alibaba and Tencent realize though that today’s wave of entrepreneurs is bringing products and services that appeal to Generation Z, and this is the reason they are heavily investing in innovative startups within and beyond the Chinese border. Furthermore, to arm themselves against newcomers, Alibaba and Tencent are combining their strengths to secure their position (see section 1).

Alibaba and Tencent are SOE-investors

As a testing-ground of the mixed-ownership reform, Tencent and Alibaba have both invested in China Unicom, the country’s second-largest wireless telecom operator. These investments are financial, but are also intended to improve the services of state firms. For example, Alibaba and Unicom launched a cloud knowledge venture in order to meet demand from SOEs and governmental institutions in China for innovative technology solutions. Tencent and China Unicom are amongst other things, working on a network security platform.

Tencent’s hometown is a Special Economic Zone

Tencent’s hometown Shenzen was appointed one of the first Chinese area’s to be a SEZ. Tencent – founded in 1998 – witnessed the effects of the nomination: the share of high-tech industries in its total industrial output increased from less than 10% in 1990 to nearly 40% in 1998. Companies could make use of incentives such as access to quality infrastructure, corporate income tax exemptions, exemptions from tariffs on high-tech equipment and special treatment for employees. Other companies that arose in this area were Huawei and ZTE ( global telecommunications equipment, networks and mobile devices company).

Alibaba and Tencent endorse the Communist Party

Tencent released a mobile game titled ‘Clap for Xi Jinping: An Awesome Speech’, in which players have 19 seconds to generate as many claps as possible for Xi.

In 2019, Alibaba reportedly developed the popular Communist Party propaganda app ‘Xuexi Qiangguo’ (in English: study to make China strong). Alibaba staff is said to be responsible for developing and maintaining the app that includes news, videos, livestream and community comments.

Confucian philosophy & Daoism underlie Alibaba’s corporate culture

Without the philosophy of Buddhism, you cannot do well when your business grows to a certain extent. If you do not know the philosophy of Daoism, you have no chance of winning during competitions. If you do not understand Confucian philosophy on the construction of organizational system, you have no chance to be sustainable when your company grows to a certain size.”

– Jack Ma, Founder and CEO Alibaba

Alibaba’s Founder and CEO is strongly influenced by China’s idea of the good life. He always carries a copy of the Tao Te Ching, the foundational text of Taoist philosophy, is a big fan of Tai Chi, and has held meetings with the senior executive team of the company in a temple. Under the eyes of Buddha, the focus would naturally be how to help others, to help ever more people.
Furthermore, Ma actively spreads the Taoist way of thinking among company employees. In the early days, all of them had a Kung Fu nickname (Kung Fu and Taoism are closely linked), Jack Ma’s being “Feng Qingyang”, which refers to an “unpredictable and aggressive” swordsman.
According to Brian Wong, Alibaba’s vice president of global initiatives, an understanding of the principles behind the philosophies do help in having a better grasp of why the Chinese tech market works the way it does. “China is much more about integrating as opposed to taking over or competing in the traditional sense,” Wong explains. “We want to create and integrate.”

Rare earths are none of Tencent’s and Alibaba’s business

Rare earths are none of Tencent’s and Alibaba’s business. Apart from Alibaba’s semiconductors, both companies do not produce goods, and therefore they are not investing in, or owning, rare earths.

Tencent has dipped its toes in vertical drama

Tencent first dipped its toes into the vertical drama category in 2018, releasing short series like My Boyfriend-ish Sister and My Idiot Boyfriend. These entertainment shows are specifically designed for the mobile screen.

Example of vertical drama by Tencent
Source: V.QQ (2018)

Alibaba and Tencent go big on blockchain

Alibaba and Tencent, together with internet giant Baidu and telecom company Huawei, have all filed information about their blockchain cloud services and issued white papers that stress the importance of developing blockchain-based cloud services as internet providers for third parties. Last year, Alibaba topped the list of the most patent applications focused on blockchain-related technologies in the world, with over 90 patent applications.

Tencent has been building blockchain services since their first white paper in 2017, and developed their TrustSQL platform as a product, service, and an application layer to provide digital asset management and authentication. Furthermore, Tencent has partnered with Intel to develop a blockchain for Internet of Things applications, while starting to test blockchain financial applications with the Bank of China in 2017.