China and the Silicon Valley are getting closer, and that may have major consequences

China2014 was the year in which China gave its official debut as major player within the global digital economy. The rise and increasing strength of the country’s technology industry did not only show in incredible growth numbers of local giants such as Tencent (which owns 3 of the world’s 5 biggest social networks), “China’s Google” Baidu (which, like Google, even wants to built a self-driving car) and the e-commerce juggernaut Alibaba, but also in attempts to expand and invest internationally and to form partnerships with Western companies.

The controversial and rapidly growing Californian transport company Uber raised significant funds from Baidu. Its competitor Lyft welcomed Alibaba as a new shareholder. Snapchat, the very successful L.A.-based app for sending self-destructing photos and videos, was in funding talks with Alibaba (and already counts Tencent as an investor). Let’s not forget the IPO of Alibaba, which did not take place in China but at the New York Stock Exchange – and became the biggest IPO in history. Also, Facebook almost invested in Xiaomi, China’s leading smartphone manufacturer (and the world’s number 3). And Facebook’s CEO Mark Zuckerberg famously showed off his newly acquired Mandarin skills.

For 2015, one must expect this trend to continue and to intensify. China’s tech giants will want to gain a foothold in foreign markets, while the leading U.S. firms search for ways to enter the difficult and highly regulated Chinese market. The synergies of closer networks between both country’s technology sectors are obvious. Already because of cultural and political barriers, both parties need each other at least to some extend, whether they like that or not.

But with the attempts to form closer ties comes a potentially critical conflict: The leading U.S. Internet companies such as Facebook, Google and Twitter have traditionally tried to defend the values of free speech and democracy (with a host of disputable exceptions due to law enforcement, moral and pragmatic business reasons). As is widely known, these values are not especially appreciated in China, a country with an autocratic political system and a censorship-based approach to “problem-solving”. As Western and Chinese tech companies join forces, invest in each other and create partnerships, a clash of values is inevitable. The likely result with be the usual business pragmatism. That could mean diminishing effort by the U.S. tech giants to defend those basic civil rights that are essential to democracies.

In October during the Hongkong demonstrations, TechCrunch pointed out that Snapchat chose not to publish a special photo story of the protests, quoting CEO Evan Spiegel with the following words: “One of my pet peeves over time is how the technology industry has tried to sell counterculture. It’s tried to sell the revolution. We’ve been really resistant to doing this. We didn’t feel like pushing these photos and videos out would turn that attention into action that would be helpful in Hong Kong.”

The article ended with a rhetorical question that will most likely receive increasing relevancy in the months and years ahead: “How will an influx of Chinese capital influence the sensibilities of U.S. startups around public discourse and free speech?”

We should pay good attention to how the rising international power and influence of China’s technology and Internet sector impacts the West’s big player’s overall stance towards defending certain democratic values. There is a risk of compromises that are good for the companies involved, but less so for the people using their services.

Photo: Flickr/ Jakob Montrasio, CC BY 2.0

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