News recently broke that China would be tightening its grip on the Internet, cracking down on Virtual Private Networks and forcing users to use their real names when creating online accounts.
With these tightening restrictions, is there hope for the future of the Internet in China?
The topic of the Internet in China is one that is often misunderstood. While the future of the Internet in China might look bleak from a western perspective, the Chinese Internet market is booming.
"In the case of Alibaba which now monopolizes much of the online retail business in China, it has more importantly built the logistics allowing for fast delivery of products which is a monumental task in a nation that still has massive distribution clogs and regional protectionism," said Laurence Brahm, author of Fusion Economics: How Pragmatism is Changing the World, in an email with Tech Times. "So it is the combination of real economy with virtual economy, and the application of pragmatism that is making these China Internet giants a success."
This, however, raises another issue - just because the Internet market is booming China doesn't mean that it is open. Because of the fact that the Internet market in China is so huge, it is unlikely that China will open its doors to foreign companies such as Facebook and Google. Facebook and Google, however, understand that being welcomed in China could mean massive growth for the companies.
"Restrictions on foreign Internet giants like Facebook and Google are driven more by commercial factors than political ones," continued Brahm. "This is something that the foreign mainstream media does not understand. The Chinese are very clear that the value of these Internet giants are determined by the number of eyeballs and not by traditional measures of profitability."
So does the future of the Internet in China look good? Depends how we define "good." It certainly doesn't look good for western Internet companies. China is unlikely to allow foreign social media and Internet companies like Facebook and Google to begin operating in China, preferring instead to have its own companies thrive.
Not only does the Chinese government want Chinese companies to thrive within the country, but it also wants them to thrive in the global market.
"WeChat is now aggressively entering the USA market with more efficient systems than either Twitter or Facebook and becoming popular even outside Chinese language speaking groups, eventually preparing to compete with them in their own market," said Brahm.
There is some hope, however, for foreign companies to access the Chinese market. Once Chinese companies have begun to compete in the International market, it is likely that China might open up to foreign companies.
