Birds that stick their heads up get shot, according to a Chinese proverb. Tencent is one of the pluckiest ducks in China’s internet swamp. Results for the first quarter, released on Wednesday, once again left it flying high: revenues of Rmb73.5bn ($11.5bn) were 48 per cent above a year ago. Investors rattled by government salvos against tech giants in the west should beware of birdshot in China too
April has seen the fiercest crackdown on content platforms yet. A Tencent news app was removed from big app stores. One variety of video sharing via Tencent’s messaging app was disabled. Zhang Yiming, founder of Toutiao, a rival news aggregator valued at $20bn, released a Maoist-style letter of self-criticism, confessing “we did not realise technology must be guided by socialist core values.”
Tencent executives are likely to be aware of that requirement. Not only was the business targeted before. But its strategy — back from the days when it was a gaming start-up — has always relied on hooking users on its content. Games, videos and literature all carry the risk of annoying the party with off-message plot lines. Technology groups can hire censors and co-operate. But what if they stir jealousy merely by their market power? Tencent shares are worth half that of the country’s big four state-owned banks combined.