In a world that is growing more and more connected every day, it’s interesting to take a look at all of the different relationships between countries and private companies. Above others, the one industry that arguably leads in terms of influence is represented by, as many have most likely guessed… the social media sector.
Social media companies can grow extremely quickly, bring massive groups of people together and also wield enormous power. Let’s take a quick look at some of the United States’ top social media companies and their relationship with China.
When it comes to social media companies, Facebook is the undisputed leader in terms of sheer size and numbers. Facebook currently has about 2.5 billion active members worldwide (as a quick reminder, the global population is just under 8 billion). This means that over 25% of the world is on Facebook. This percentage is probably even larger when you consider the fact that not every person in the world has access to the internet.
Facebook was founded by Mark Zuckerberg while he was at Harvard and he is still very much involved in running the company as well as the (key) decision-making process. Today, they are the center of quite a few political conflicts in the U.S. and have been accused of influencing presidential elections as well as promoting fake news articles.
Facebook and China
Facebook is currently banned in China due to the country’s strict guidelines with respect to controlling what can or can’t be viewed on the internet. China prohibits all content that is not perceived as being in the best interests of the state. Their internet security is so broad (considered to be the most intense in the world) that is has been dubbed “The Great Firewall”.
Facebook was blocked in 2009 after being used for communication by protesters in western China.
It’s not that China has a specific vendetta against Facebook. The Great Firewall prevents quite a few technology companies from operating in China and also prevents their citizens from accessing foreign news sites such as the BBC, The New York Times, and The Wall Street Journal.
Some of the other major technology companies that are banned in China include:
● Google (this includes YouTube, Gmail, Google Play, Google Maps, Google Drive, Hangouts, Blogger, etc.).
Despite being banned in China, Facebook still makes quite a bit of money from Chinese-based companies. For example, they saw approximately $5 billion in ad revenue from Chinese-based companies in 2018, which would make the country Facebook’s second-largest ad market. If Facebook were to ever bypass the ban by the Chinese government, there is no doubt that their company would thrive.
In 2018, Facebook also attempted to establish a $30 million subsidiary in Hangzhou to incubate start-ups and give advice to local businesses. However, permission to run this start-up was quickly withdrawn.
Instagram falls under the umbrella of Facebook-owned companies and is also banned in China. Instagram was blocked in September 2014 during pro-democracy protests in Hong Kong. The main reason cited for the ban was that images of protests in Hong Kong might inspire those in mainland China to engage in similar movements.
Since Instagram is owned by Facebook, they will probably gain access to China at the same time Facebook does (if they’re ever given the green light, that is).
WhatsApp is another popular Facebook-owned company, although WhatsApp is more of a global app (available in 180 countries). WhatsApp is no small fry itself, even when compared to the Goliath Facebook. They boast that over 1.6 million users log in each month to access their messaging app.
WhatsApp is available in 180 countries but China is not one of them. WhatsApp was blocked from China in September 2017 and is also blocked in Cuba, Syria, Iran, the UAE, North Korea and Qatar. However, some of these bans are applied to Voice Over Internet Protocol services as a whole. This means that the WhatsApp messaging service is allowed, just not their voice calling or video calling.
WhatsApp (and many other social sites) can still be used by the ambitious user who purchases a VPN. A VPN is a virtual private network that allows the user to bypass certain firewall restrictions and access public connections as though they were private.
Twitter is also banned in China. Shortly after the anniversary of the Tiananmen Square Protest, Twitter received the ban in June 2009. Twitter, even more than other social media companies, is one that can quickly corral people and get voices heard. This is what the Chinese government wants to avoid.
Despite the ban, Twitter still has an estimated 10 million active users in China, who use VPNs to circumvent the ban. This number is a rough estimate because, due to the private nature of VPNs, it is very hard to track and monitor such activity.
The ban on Twitter includes Twitter-owned Periscope as well.
Continuing the trend, Snapchat is also banned in China. It’s unclear when Snapchat was initially banned in China. However, Snapchat does have a small research and development office in the country to work on Spectacles. These are Snap’s camera-equipped smart sunglasses.
This move was most likely made because the Spectacles are already produced there and the office only has about 20 people.
Reddit was also blocked by China in August 2018. Due to the nature of some threads to be politically charged or discuss taboo topics (such as censorship), many Reddit users were surprised that the site hadn’t been banned earlier.
Tumblr was also blocked from China in May 2016, although pages containing politically charged content have been heavily censored in China before then.
Pinterest was blocked in China in March 2017, around the time when China was hosting its annual “Two Sessions” political gathering.
It’s worth noting that Chinese companies have had their fair struggle of gaining access to American markets. TikTok is owned by China-based Bytedance and is quickly becoming one of the most popular social media apps in the United States. It is estimated that they currently have about 70 million users there. However, TikTok has been drawing more and more scrutiny from the U.S. government for passing data to the Chinese government. They are now under formal investigation by the FBI and many politicians have manifested their intention of banning them. Although not a social media company, Donald Trump has also barred U.S. companies from working with Huawei through 2021.
Who Isn’t Banned?
Clearly, The Great Firewall does a very effective job of keeping out foreign internet companies. Not only that but it was estimated by Harvard University that as many as 488 million social media posts are fabricated by the Chinese government each year. These posts are pushed out by government employees on Chinese social networking sites in an attempt to divert attention away from sensitive issues (such as political protests in other parts of the country). This shows just how far the government is willing to go to control what is being communicated online.
This leads us to a fairly obvious question: what do Chinese citizens use for social networking and the internet?
The answer is that, because China has stifled so many foreign companies, Chinese-owned companies have been able to thrive. For example:
➢ eCommerce retailers such as Alibaba and JD.com have been able to thrive in the absence of Amazon or eBay
➢ For searching, Chinese internet users turn to Baidu instead of Google
➢ Instead of WhatsApp or Facebook, the apps Tencent, QQ or WeChat allow citizens to connect with each other.
➢ Since Google and YouTube are both banned, Chinese citizens turn to Tudou and Youku
Moving forward, it will be interesting to see if The Great Firewall is ever repealed. If that ever happens, it is sure to have global repercussions, as technology companies will stumble over each other in an attempt to enter the market.
When it comes to social media companies, the total number of users generally drives their profitability and power. The larger the network, the more the company can make from selling ads. Also, due to the social nature of people, the more people that use a platform, the more other people are going to join. People want to do what their friends are doing, in other words.
Due to this, China wields a tremendous amount of potential power (considering the size of the Chinese population). When you take a look at the following picture, we are convinced that U.S. social media companies are chomping at the bit to get into the Chinese market:
We hope that you’ve found this article valuable when it comes to gaining information about social media giants in the United States and their relationship with China. If you’re interested in reading more, please visit the ChinaFund.com blog as well as the “New Here?” section of our website and for a more personalized experience, our consulting services are at your disposal.