China’s biggest e-commerce firm Alibaba Group announced on April 29, 2013 that it would acquire an 18 percent stake in Sina Weibo for 586 million US dollars, a deal that could reshape the country’s Internet landscape. Sina Weibo is Chin...
China’s biggest e-commerce firm Alibaba Group announced on April 29, 2013 that it would acquire an 18 percent stake in Sina Weibo for 586 million US dollars, a deal that could reshape the country’s Internet landscape. Sina Weibo is China’s most popular Twitter-like microblogging platform with over 500 million user accounts, but it has yet to find a profitable business model.
By connecting the millions of Weibo users to Alibaba, an e-commerce platform that handled more transactions than Amazon and eBay combined last year, the deal is widely heralded as a game changer that could jump-start an era of social commerce, or social media-driven e-commerce, in China.
New exclusion in the era of social commerce
Alipay has become the world's biggest third-party online payment platform. By IvanWalsh.com. (CC: BY)
But the deal also marks a subtle trend which will enable the authoritarian state to tighten its grip on the Internet. As the line dividing economics and politics in the Internet space erodes, new possibilities arise for governments to pursue systematic online persecution beyond content control. Google’s Eric Schmidt and Jared Cohen spell out this scenario in their new book “The New Digital Age“:
As connectivity spreads, Internet service and mobile devices offer vital outlets for individuals to transcend their current environment, connecting them with information, jobs, resources, entertainment and other people. Excluding oppressed populations from participating in the virtual world would be a very drastic and damaging policy [...]. As banking, salaries and payment transactions move increasingly onto online platforms, exclusion from the Internet will severely curtail people’s economic prospects. It would be far more difficult to access one’s money, to pay by credit card or get a loan.
As a country facing the Internet “dictator’s dilemma,” the above scheme presents great potential for China to bring the Internet’s convenience to bear upon curtailing of online freedom. By embracing the Internet, the Chinese government has reaped its benefits for economic and social developments, thereby enhancing its legitimacy. According to McKinsey, a global management consulting firm, China is the second largest e-tailing market in the world, after the United States, with sales totaling 120 billion US dollars in 2011. But at the same time, the Internet has become a vibrant public sphere filled with criticisms about government policies and corruption.
The well-known Great Firewall, which blocks “undesirable” foreign websites, and elaborate social media censorship, with forced cooperation from private Internet companies, are the official responses. A recent Economist special report described the Chinese Internet, with its distinct mix of economic freedom and political “unfreedom”, as a flourishing “giant cage” which is constantly watched over.
The Alibaba deal is a foretaste of how the Chinese regulators further manipulate the economic desires and needs of citizens. Bill Bishop, publisher of the Sinocism China Newsletter, highlights its sinister aspect in his New York Times Dealbook column that the deal, “through integrated online payment functionality, has the voluntary real name registrations of many users”.
Sina Weibo, China's biggest microblogging service. By jonrussell CC: BY-SA.
In December 2011, the Beijing Municipal Government issued rules requiring microblogging services to verify the identity of their users. In December 2012, China’s legislature, the National People’s Congress, passed a law requiring users to provide their real names when registering with an Internet service provider. While the rules have thus far not been well implemented, China’s leadership sees this as a top priority. In late March 2013, the State Council released its task list for the next five years, which includes implementation of an Internet real name registration system by June 2014.