In a way this fascinating book is misnamed.  Much of the ambition it describes is about people and geeks and, if anything, the role of ‘China’ as we now understand it in the West is about the throttling or takeover of that ambition.

The first part tells the story of the establishment, growth and scaling of not just Tencent, but also Alibaba, Didi, and a host of smaller businesses which used the power of the internet and the lack of alternative institutions to create entities which could dominate entertainment, payments, deliveries and ridesharing.

The personal stories of the developers of these businesses are in some ways very familiar from the stories of Google, Amazon, Microsoft and Apple.  Small groups of hardworking and ambitious techies in small and under-ventilated spaces working like incredible hours to develop a service and change their worlds. People are the same everywhere. The stories diverge as time goes on in two or maybe three respects – the size of the market, the availability of finance, and the attitude of governments both at home and abroad.  

The market size that these companies could address was and is huge.  Not only the local population, but also expatriates and the diaspora with little other ‘normal’ routes to keep in contact, use banks and so on.  The market gap in an underdeveloped country which could nonetheless engage in modern business was significant and could be addressed by entrepreneurs who had in many cases been educated abroad.  These entrepreneurs had no hesitation in engaging in cutthroat competition worthy of the best stories of the ‘robber baron’ era.  They were focused on building monopolies and capturing users of as many consumers as possible. Executives changed sides, fought for their constituency businesses and engaged in internal and well as external battles.

Secondly, finance.  By the time the fledgling businesses were ready to engage in significant expansion, venture capital firms operating out of Silicon Valley and elsewhere were eager for new investment opportunities.  Firms such as Sequoia had an early start and by the 2020s, Chen points out that more than 90 per cent of US foundations and university funds have some exposure to China.  Tiger Global, for example, has 10% of its unicorns in China.  Chinese start-up firms spent a lot of time crossing the Pacific to woo venture capital firms and private equity funds. While Chinese tech firms have some holdings in US and European tech ventures, the financial balance is very different since these are cross holdings rather than venture capital investments.  It is possible that firms such as Tencent and Alibaba could not have grown as they did without the availability of US finance in particular.

Finally, the attitude of governments.  And yes, in the plural. Firstly, the government of Deng Xiaoping opened up China to such investors. While they were restricted in their ability to invest in more real-world activity that were viewed as the bedrock of the economy, such as manufacturing, the virtual businesses were not given the same amount of scrutiny.  At the same time, there were no restrictions in providing finance to such companies on the US side.  Invisibility ruled 20 years ago when all of this kicked off.

The final part of this book documents how this changed.  The Chinese Communist Party woke up to the dangers of this untrammelled consumer explosion and to the opportunity of the massive data that it was generating.  On the other hand, the companies failed to see the knife edge that they were treading.  Chen documents the gold mine that tech companies have provided to investors, and these of course include domestic investors who almost always have some kind of influence behind them.  In changing political times, and the advent of Xi Jinping, saw the rise and fall on influential families and this in turn could rebound on attitudes to companies.

Pony Ma of Tencent and Jack Ma (not related) of Alibaba have both in different ways felt the hand of bureaucracy.  Tencent saw a sudden change in how games were to be regulated, and restriction on hours of play for youngsters.  Concern about increasing myopia among children and young people, and about a falling birth rate have added to a desire to restrict gaming which is the largest element in Tencent’s revenues.  There was a sudden banning of a $100 billion industry offering out of school tutoring, on the grounds it affected children badly and made education ‘capitalist’. Alibaba fell foul of making criticisms of the regulatory system and saw it’s proposed listing of holding company Ant on the Hong Kong stock exchange pulled in 2020 in a humiliating climbdown. Jack Ma has stepped down from the company that he founded and has disappeared into philanthropy.  Pony Ma still runs Tencent but has always kept a lower profile.

The other side of this is the attitude of western governments, in particular that of the US given its large-scale funding.  The temperature in this area is rising.  Chen’s book unsurprisingly ends with reference to Neal Stephenson’s ‘Snow Crash’, the go to sci-fi for dystopian descriptions of the metaverse and incidentally a great novel.  He paints a picture of disintermediation leading to monopoly corporations and destruction of public services.  This is an outcome which will not play out in China, where the crackdown on freewheeling entrepreneurs might lead to a dystopia but it won’t be that one.

On the other side of the Pacific, there are increasing attacks on venture capital investments in Chinese tech firms which are investing in AI and apparently military ventures.  Tencent is at the same time launching and expanding Tencent Cloud, building an alternative to AWS and GCP for Asia Pacific countries.  A world split seems to be accelerating.  Before the end of Trump’s presidency he tried to ban WeChat, Tencent’s messaging service (and more), from the US.  A plea in a San Francisco court negated this on the grounds that insufficient evidence of security risks had been shown and that it was an essential tool for Chinese speaking Americans.  As local Chinese pointed out, that could not have happened in China!

Where all this will end is a crucial geo-political question reaching way beyond a business book.  But Chen’s description of how this all started, and how intertwined global finance is, gives a fascinating insight into some of the pressures and tensions which underlay the concerns of defence and security professionals. The title is Influence Empire.  I am left wondering who is influencing who, from users to platforms, to game writers and politicians and billionaires.  And who, if anyone, will win.