The Revival of the Rhine Model for Digital Capitalism

We might never ask ourselves what companies and organizations are good for. But amidst the rising critique of capitalism and corporatism that undermines companies’ social contracts, they are in search of a new narrative and purpose to answer this question. The traditions of the Rhine model of capitalism could provide inspiration for our times.

Observations

  • Last week, members of America’s Business Roundtable, a group of 200 CEOs of major U.S. companies that, all combined, represent about $7 trillion in annual revenue, issued a statement called “Business Roundtable Redefines the Purpose of a Corporation to Promote ‘An Economy That Serves All Americans’”. As the “American Dream is alive, but fraying” (Dimon, CEO of JP Morgan Chase), these companies vowed to invest more in workers and communities, play a bigger role in social issues, and aspire to meet the needs of all U.S. stakeholders (e.g. employees, neighborhoods, the environment).
  • Collins and Porras describe in their book Built to last: successful habits of visionary companies (1994) that “visionary companies” do business according to a vision that expresses the company’s raison d’être, its ideals and values, as well as expressing the company’s broader societal goals and objectives. Visionary companies have a stable management and low employee turnover, a strong focus on long-term innovation and pay attention to the social effects of their business, and as a result they realize higher profits. Recent research by McKinsey shows that companies that operate from a long-term horizon have superior financial performance and higher investment rates, boosting employment. Likewise, research by Credit Suisse shows that family firms – which could be considered paradigmatic examples of companies with a long-term horizon given management’s emotional attachment to survival – outperform companies that are owned by diverse shareholders on a number of metrics.
  • On a macro-level, Michel Albert shows in his book Capitalism vs. Capitalism: how America’s Obsession with Individual Achievement and Short-Term Profit has Led It to the Brink of Collapse (1993) how the social market economies found in Europe have a stronger focus on societal consensus among all stakeholders, an active role of the state and a long-term orientation and how these economies outperform the U.S. on most socio-economic indicators (e.g. inequality, crime, life expectancy, health, happiness).
  • The social contract of big tech is weakening. Until recently, tech companies were hailed as beneficial disruptors, ready to shake up many rusted and consolidated industries, driven by visionary founders that brought creative destruction from their innovations produced in their garages, embodying the American Dream. However, we have now entered a period of backlash against big tech. Since 2017, we have seen numerous scandals, social media platforms causing negative social externalities (e.g. polarization due to the spreading of extremist, illegal and fake content), big tech actually hampering innovation, while these “superstar firms” depress wages, often have bad working conditions, and contribute to a falling labor share while realizing huge profits and cash reserves, thus contributing to rising inequality (especially on a local level, such as in Silicon Valley’s Bay Area). As such, big tech has gone from being heroic to harmful, and tech entrepreneurs from do-gooders to bandits (as exemplified by the rise and fall of the public image of Mark Zuckerberg).

Analysis

Since the 1970s, the dominant raison d’être of companies (especially in the U.S.) was to increase their value to its shareholders. This is called the “Friedman doctrine”, after neoliberal thinker Milton Friedman in his famous 1970 essay “The Social Responsibility of Business is to Increase its Profits”. Therefore, the recent turn of America’s Business Roundtable, now advocating a broader, societal purpose of its members’ companies, implies a significant shift in the attitudes and ideas of big business in corporate boardrooms.

These qualities of the Rhine model are becoming increasingly important, as the social contract of business organizations is under pressure because of rising socio-economic inequality and climate change

In part, this is a pragmatic and strategic move. The statement could be seen as an attempt to pre-empt an attack from politics, as Democrats are increasingly voicing anti-corporate sentiment in the face of rising corporate power and profits. For example, Elizabeth Warren made breaking up big tech her core issue, while Bernie Sanders wants regulation of corporate financial behavior tied to social objectives (e.g. raising worker pay). If Democrats win the 2020 presidential elections, combined with a majority in the House of Representatives, this will give them significant regulatory firepower. Furthermore, given the deteriorating public image of big business, they need to position themselves in order to attract future talent, which is why companies increasingly want their employees to take a stand on social, political and economic issues. Lastly, such a stance can attract a new source of finance. We have written before that younger generations prefer to invest and donate to organizations with a strong sustainable and ethically responsible stance, further empowered by digital technologies that can track their investments. Similarly, large institutional investors are demanding that the companies in their portfolios take more social responsibility (e.g. BlackRock) and help to address climate change (e.g. State Street). As such, business ethics is no longer an oxymoron, and could even become a source of comparative advantage for companies.

However, the move also marks a more fundamental turn in the philosophy of management and organizations. In his book Birth of Biopolitics, Michel Foucault distinguishes between two major forms of liberal policy: the German “ordoliberalism” of the Freiburg School that emphasizes the need for state intervention to generate a well-functioning social market economy. He contrasted this with the Chicago and Austrian schools that fiercely criticize any government involvement in private affairs and hold that markets – when left to themselves – produce the best socio-economic outcomes (i.e. laissez faire economics). This was inspired by the libertarian and individualistic cultures of the U.K. and U.S. Michel Albert built on this distinction and showed that there are in fact different types of capitalism: the Anglo-American model in the Anglophone world, and the Rhine model on the European continent, with the latter outperforming on most socio-economic indicators. This debate continued in the work of Hall and Soskice, who distinguished between two varieties in organizing capitalist societies: liberal-market economies and coordinated market economies (e.g. in Japan, Germany, the Nordics, Switzerland).

So the coordinated, social market “Rhine” economies, mostly found in continental Europe, can thus be distinguished from the laissez faire economics found mostly in the Anglophone world. A few core distinctions with respect to their ideas of a company stand out. First, the Rhine model of capitalism focuses on all stakeholders of the organization, and on the social and environmental embeddedness of the company, whereas the Anglo-American model focuses solely on shareholder value. Furthermore, organizations in the Rhine model focus on long-term relationships (e.g. enduring employment of managers, contracts with suppliers) and innovation to ensure survival, while Anglo-American organizations focus on short-term profits (related to their focus on shareholder value), and understand society primarily in terms of market competition. In contrast, the Rhine model focuses on societal consensus and collaboration between various social, public and economic organizations to realize objectives that transcend individual agents. The Dutch poldermodel (or “Rhine delta model”) is a good example of this. Lastly, the Rhine model assigns an active role to the state, which should help to establish conditions under which the market won’t derail and the behavior of individual companies will not result in bad macro-social outcomes.

These qualities of the Rhine model are becoming increasingly important, as the social contract of business organizations is under pressure because of rising socio-economic inequality and climate change. We have argued before that if we want to tackle these dual grand challenges of our times, we need a radical overhaul of the meta-rules of our socio-technical systems; that we are in need of a Second Deep Transition of the way we run our economies and society. One such directionality should be for companies to take more responsibility for and be more aware of their social embeddedness and their environmental impacts.

This also provides an opportunity for Europe to strategically position itself in the sensor-based economy. Recently, we wrote that a European Stack is taking shape, with a focus on setting the ethical standards for the implementation and social adoption of next-gen technologies. Europe’s socio-democratic and collaborative capitalism could strengthen its position as a regulatory and normative tech superpower, in between the libertarian capitalism of Silicon Valley and China’s techno-authoritarianism. Furthermore, given the rich and strong civil society in European countries, they could prove fertile soil for the emerging decentralized Stack, in which innovation is open-sourced; companies, public and social parties collaborate to tackle large social and environmental problems. Lastly, by operating on the basis of trust and reciprocity, values such as privacy and autonomy, as well as ethical codes of conduct could be strengthened by data ownership for citizens that are organized around specific co-operatives.

Implications

  • Recently, POLITCO obtained a draft plan in which EU officials want a €100 billion wealth fund to bolster “European champions” against American and Chinese business rivals, as well as set more stringent regulation for tech companies and measures against strategic takeovers. Last year, we forecast that, facing the risk of being left behind, Europe is in search of its own European champions, and combined with strategic positioning on the decentral Stack, the EU should redefine its investment strategy. For example, in public-private partnerships in healthcare, public distributed ledgers, internet architecture, the. sharing economy.
  • As the social contract of big business – and big tech in particular – is under increasing pressure, we can expect these companies to take more social and ethical responsibility for the negative externalities their products and services generate. Examples of this are already emerging, such as Microsoft spending $500 million on “affordable housing” in Seattle, Uber sharing its data with city planners to help tackle mobility problems, Facebook setting up “war rooms” to monitor fake and extremist news on their platforms at times of important political events, or Airbnb setting up offices to reduce “mass tourism” around certain hotspots and popular destinations.

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 contirubte 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 SOE-investors

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 earhts 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)