It´s complicated, says former Baidu communication director Kaiser Kuo about the relationship between China´s booming tech companies and the government. The outside world sees even private companies often as extentions of the government. Wrong, explains Kaiser Kuo in interview with the Young China Watchers.
YCW: The government investigated Baidu because a student died of cancer after receiving treatment from a hospital he found through the search engine. The case highlights how even private companies have to work closely with the Chinese government and how easily they can fall out of favor. How do China’s largest private companies—Alibaba, Tencent—operate in this environment, and do you think it holds them back at all?
KK: Yes, I think the environment ultimately hobbles much more than it helps. In Baidu’s case, there’s a commonly held belief among Chinese and non-Chinese observers alike that the company is the creature of the Party—a national champion that’s played on an uneven pitch with government help. As I only recently left the company I can’t say too much here. But this is not the first time that Baidu has been thrown under the bus and not the first time it’s been made a scapegoat toward which public outrage has been deliberately directed.
The interesting thing about the major Internet companies in China is that many, if not most, were founded by either returnees or by Chinese nationals with extensive Western (and mainly American) exposure. They were initially funded—and sure, there are exceptions like Tencent—by American venture capital and listed on American stock markets. All this was happening under the watch of a Party that ordinarily insists on dominating the commanding heights of any strategically important sector. It all happened too fast, and all the Party could do to assert controls over this creature with so much Silicon Valley, libertarian DNA was to impose ex-post facto controls. There’s always going to be tension between the powerful Internet companies and the Party state. I believe collision, not collusion, will be the order of the day.
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