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New thinking, new technology for the creative sectors
A MediaTainment Finance supplement

Facebook, Twitter and several Western tech services blocked or restricted in China have no intention of giving up...

Mark Zuckerberg speaks “near-fluent” Mandarin. The founder/CEO of social media goliath Facebook has just been appointed to the board of the Tsinghua University School of Economics and Management in Beijing.

Facebook has started advertising for Mandarin-speaking Chinese staff based in the US and is poaching IT engineers from Beijing. And there are reportedly plans to open its first office in Beijing.

What would a global tech conglomerate not do to enter the Chinese market?

But Communist China has been a tough nut to crack, not only for Facebook, but also for Google, Twitter, Microsoft, Apple, and many more digital tech companies in the West.

Facebook has been blocked from China since 2009. And several other tech-media platforms are also prohibited, censored or given restricted access to Chinese consumers. Most social media postings coming from China usually use private networks, not the open Internet.

With a population of 1.3 billion people, the status as the world’s second biggest economy, and 600 million-plus Internet users, China could not be ignored. But the country also poses myriad challenges.

Despite ending the centrally controlled economy in the late 1970s, China’s Communist government retains a tight hold over most businesses. It also remains wary of highly influential global media conglomerates, especially after the international coverage of the 1989 military crackdown on student protesters at Tiananmen Square.

And when whistleblower Edward Snowden disclosed the extent to which the US National Security Agency worked with tech companies to spy on individuals and politicians worldwide, China’s distrust of digital tech media services deepened.

The country’s Ministry of Public Security’s Golden Shield Project (also known as the Great Firewall of China) is the initiative used by China to check on and control content distributed via the Internet.

The government of China is sensitive to the powerful influence garnered by international social media networks: Facebook has more than 1 billion monthly active users and Twitter has more than 270 million active users, while Google+ boasts more than 340 million.  China would prefer to control the impression it makes on their subscribers.

These social media networks, however, want to sign up only a fraction of China’s estimated 618 million Internet subscribers legitimately, but without giving in to China’s censorship conditions.

One analyst guessed that if Facebook were allowed to reach one third of China’s online users, its capitalization value could jump 5% to US$216bn from US$209bn in October 2014.

That sounds like a good reason for Sheryl Sandberg, Facebook’s COO, to be seen with Cai Mingzhao, director of the State Council Information Office, in September 2013. Dick Costolo, Twitter’s CEO, made his first official visit to China earlier this year.

Yet the restrictions seem entrenched…

To read a more in-depth version of this story, download the full edition of TechMutiny Issue No.8

Plus - the latest edition of sister business journal MediaTainment Finance features an in-depth report on the creative and media-tech industries in China.

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