Philippa Kaur

IN 1987 PANASONIC made an adventurous bet on China. At the time the electronics giant’s home country, Japan, was a global manufacturing powerhouse and the Chinese economy was no larger than Canada’s. So when the company entered a Chinese joint venture to make cathode-ray tubes for its televisions in Beijing, eyebrows were raised. Before long other titans of consumer electronics, from Japan and elsewhere, were also piling into China to take advantage of its abundant and cheap labour. Three-and-a-half decades on, China is the linchpin of the multitrillion-dollar consumer-electronics industry. Its exports of electronic goods and components amounted to $1trn in 2021, out of a global total of $3.3trn. These days, it takes a brave firm to avoid China. Increasingly, however, under a weighty combination of commercial and political pressure, foreign companies are beginning to pluck up the courage if not to leave China entirely, then at least to look beyond it for growth. Chinese labour is no longer that cheap: between 2013 and 2022 manufacturing wages doubled, to an average of $8.27 per hour. More important, the deepening techno-decoupling between Beijing and Washington is forcing manufacturers of high-tech products, especially those involving advanced semiconductors, to reconsider their reliance on China.Between 2020 and 2022 the number of Japanese companies operating in China fell from around 13,600 to 12,700, according to Teikoku Databank, a research firm. On January 29th it was reported that Sony plans to move production of cameras sold in Japan and the West from China to Thailand. Samsung, a South Korean firm, has slashed its Chinese workforce by more than two-thirds since a peak in 2013. Dell, an American computer-maker, is reportedly aiming to stop using Chinese-made chips by 2024. The question for Dell, Samsung, Sony and their peers is: where to make stuff instead? No single country offers China’s vast manufacturing base. Yet taken together, a patchwork of economies across Asia presents a formidable alternative. It stretches in a crescent from Hokkaido, in northern Japan, through South Korea, Taiwan, the Philippines, Indonesia, Singapore, Malaysia, Thailand, Vietnam, Cambodia and Bangladesh, all the way to Gujarat, in north-western India. Its members have distinct strengths, from Japan’s high skills and deep pockets to India’s low wages. On paper, this is an opportunity for a useful division of labour, with some countries making sophisticated components and others assembling them into finished gadgets. Whether it can work in practice is a big test of the nascent geopolitical order.This alternative Asian supply chain—call it Altasia—looks evenly matched with China in heft, or better (see chart). Its collective working-age population of 1.4bn dwarfs even China’s 980m. Altasia is home to 154m people aged between 25 and 54 with a tertiary education, compared with 145m in China—and, in contrast to ageing China, their ranks look poised to expand. In many parts of Altasia wages are considerably lower than in China: hourly manufacturing wages in India, Malaysia, the Philippines, Thailand and Vietnam are below $3, around one-third of what Chinese workers now demand. And the region is already an exporting power: its members sold $634bn-worth of merchandise to America in the 12 months to September 2022, edging out China’s $614bn. Altasia has also become more economically integrated. All of it bar India, Bangladesh and Taiwan has, helpfully, signed on to the Regional Comprehensive Economic Partnership (RCEP, which also includes China). By harmonising the rules of origin across the region’s sundry existing trade deals, the pact has created a single market in intermediate products. That in turn has eased regulatory barriers to complex supply chains that run through multiple countries. Most Altasian countries are members of the Indo-Pacific Economic Framework, a newish American initiative. Brunei, Japan, Malaysia, Singapore and Vietnam belong to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which also includes Canada, Mexico and several South American countries.A model for the Altasian economy already exists, courtesy of Japanese companies, which have been building supply chains in South-East Asia for decades. More recently Japan’s rich Altasian neighbour, South Korea, has followed its example. In 2020 South Korean firms’ total stock of direct investments in Brunei, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam—which together with unstable Myanmar make up the Association of South-East-Asian Nations (ASEAN)—and Bangladesh reached $96bn, narrowly outstripping Korean investments in China. As recently as a decade ago the stock of Korean companies’ investments in China was nearly twice as large as in Altasia. Samsung is the biggest foreign investor in Vietnam. Last year Hyundai, a South Korean carmaker, opened its first ASEAN factory, making electric vehicles in Indonesia. Now more non-Altasian firms are eyeing the region, often via their Taiwanese contract manufacturers. Taiwan’s Foxconn, Pegatron and Wistron, which assemble gadgets for Apple, among others, are investing heavily in Indian factories. The share of iPhones made in India is expected to rise from around one in 20 last year to perhaps one in four by 2025. Two Taiwanese universities have teamed up with Tata, an Indian conglomerate with ambitious plans in high-tech manufacturing, to offer courses in electronics to Indian workers. Google is shifting the outsourced production of its newest Pixel smartphones from China to Vietnam. More sophisticated manufacturing, especially of geopolitically fraught semiconductors, is also moving to Altasia. Malaysia already exports around 10% of the world’s chips by value, more than America. ASEAN countries account for more than a quarter of global exports of integrated circuits, easily surpassing China’s 18%. And that gap is growing. Qualcomm, an American “fabless” chipmaker, which sells microprocessor designs for others to manufacture, opened its first research-and-development centre in Vietnam in 2020. Qualcomm’s revenues from Vietnamese chip factories, many of which belong to global giants like Samsung, tripled between 2020 and 2022. Earlier this month the local government of Ho Chi Minh City announced that it was courting a $3.3bn investment from Intel (though it later struck the American chip giant’s name from the statement online). China’s huge advantage has historically been its vast single market, knit together with decent infrastructure, where value could be added without suppliers, workers and capital crossing national borders. For Altasia to truly rival China, therefore, its supply chain will need to become far more integrated and efficient. Although RCEP has greased the wheels of intra-Altasian commerce somewhat, the flow of goods faces more obstacles than it does within China. Its member countries will need to play to their comparative advantage. For now the infrastructure that connects them is shabby, at best. Finicky regulations and national ambitions can easily gum up the alternative supply chain. Altasia’s poorer countries are also not necessarily keen on the logical division of labour, which would see them with a bigger role in the more menial parts of the electronics supply chain. And forgoing all Chinese-made parts is next to impossible. Thamlev, an American electric-bike startup, moved production from China to Malaysia in 2022 in order to avoid a 25% American tariff, but still needed to import Chinese components. As a result, it took a month longer for its e-bikes to reach American riders. Prospects for deeper integration are hazy, both within Altasia and with big consumer markets in the rich world. India, on whose 1.4bn people Altasia’s future may depend, seems in no rush to become part of RCEP. Although the country has, with other Altasian neighbours, signed up to America’s Indo-Pacific framework, it has opted out of the initiative’s trade provisions. And these anyway lack bite: America is in a protectionist mood and has offered no tariff cuts or better access to its vast market. One ASEAN policymaker likens it to a doughnut, lacking substance in the middle. Altasia will certainly not replace China soon, let alone overnight. In January, for example, Panasonic announced a big expansion of its Chinese operations. But in time China is likely to become less attractive to foreign manufacturers. Chinese labour is not getting any cheaper and its graduates are not getting much more numerous. America may yet realise that reducing its reliance on China in practice requires closer ties with friendly countries, including membership of the CPTPP, the precursor of which collapsed after America pulled out in 2017. And as a budding alternative to China, Altasia has no equal. ■ More

Much of the Western military hardware used in Ukraine sounds familiar to any student of 20th-century warfare: surface-to-air missiles, anti-tank weapons, rocket launchers and howitzers. But Ukraine’s use of Western information technology, including artificial intelligence (ai) and autonomous surveillance systems, has also had a powerful, if less visible, impact on Russian forces. Commercial vendors supply Ukrainian troops with satellites, sensors, unmanned drones and software. The products provide reams of battlefield data which are condensed into apps to help soldiers on the ground target the enemy. One American defence official calls them, appreciatively, “Uber for artillery”. Listen to this story. Enjoy more audio and podcasts on More

NELSON PELTZ is a man accustomed to winning. So when his hedge fund, Trian Partners, called off a proxy fight for a seat on Disney’s board on February 9th, it was no surrender. A day earlier Bob Iger, Disney’s newly returned CEO, announced sweeping changes to the entertainment powerhouse of the sort Trian had sought. A new organisational structure will shift power from bean-counters back to creative teams. That reverses the changes under Bob Chapek, whom Mr Iger hand-picked as successor in early 2020 and then replaced in November. Operating costs will be slashed by $2.5bn, with a further $3bn to be cut from content spending, together equivalent to 8% of expenses; 7,000 staff will go. To stanch financial losses at its Disney+ streaming service, in December Mr Iger raised subscription prices in America by 38%. Disney will sit out the “global arms race for subscribers”, he says. Instead, he hinted that it may license more of its catalogue to competing platforms to juice profits. To top it off, Disney will restart paying out dividends by the end of 2023.For all that, Mr Iger left several key questions unanswered. The first concerns Disney’s long-term plan for streaming, which he has yet to articulate. Mr Iger has said he wants to focus on “core brands and franchises”. Their online home is Disney+. He also wants to avoid “undifferentiated” general entertainment. That is the preserve of Hulu, a streamer two-thirds-owned by Disney. Disney’s arrangement with Comcast, a cable giant that owns the remaining third, is set to expire in 2024. Hulu’s slowing growth and deteriorating margins suggest that the status quo is no longer working. Comcast’s boss indicated in September he would be open to buying Disney’s stake “if it was up for sale”. Mr Iger must decide whether to let go of Hulu’s shows, which according to Parrot Analytics, a data firm, do better than those of Disney+ with older viewers and women, or to fork over around $9bn for Comcast’s stake. The second unresolved question for Disney relates to another part of its media empire, ESPN. The sports network has always been an uneasy fit with Disney’s strategy, first laid out in 1957 by its founder, Walt Disney, of monetising creative franchises across several formats and distribution channels. Mr Iger’s decision to split ESPN out as a separate business unit is a tacit recognition of its awkward position. For now, Mr Iger says Disney has no intention of spinning out ESPN. That may change if the firm decides to make another big acquisition, either of Hulu or, say, in the rapidly growing market for video games. Given Disney’s hefty $40bn of net debt, proceeds from the sale of ESPN may be needed to help bankroll any deal.That is a lot for Mr Iger to sort out in the 22 months he has left on his contract, during which he must also find an abler successor than Mr Chapek. Disney’s market value of $200bn or so is up by 19% since his return, suggesting that investors have more faith in him than they did in the other Bob (see chart). But they may trust him less than they did his younger self: the firm is still worth $60bn less than when he retired in early 2020. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

Fans of South Korea’s wildly successful pop industry are used to the intrigue surrounding new groups, band members’ romances and their misbehaviour. Now a new source of K-pop drama has emerged from an unexpected quarter. On February 10th HYBE, an entertainment house which represents the genre’s biggest name, BTS, agreed to buy a 14.8% stake in SM Entertainment, a rival, from its founder and former chief producer, Lee Soo-man. Mr Lee, who is no longer involved in his firm’s day-to-day business, would be left with roughly 4%, making HYBE its largest shareholder. In pursuit of an even closer tie-up, HYBE simultaneously launched a tender offer to buy another 25% at a similar premium to the shares’ market price that it is paying Mr Lee. SM Entertainment says it will resist any attempt at a hostile takeover. The stage is set for a corporate showdown worthy of any pop feud. Listen to this story. Enjoy more audio and podcasts on More

On February 14th Adani Enterprises reported robust earnings. Its ports-to-power parent conglomerate had a solid 2022. Not solid enough to reassure investors: the Indian group’s market value is down by $130bn since a short-seller accused it of fraud last month (which the group denies). Its rebuttal of the charges has slowed but not arrested the slide. To preserve cash, Adani will reportedly halt some capital spending. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

If people used the time they currently devote to reading books about productivity hacks to do some actual work, their productivity problem would be solved. But occasionally these books contain nuggets of wisdom. In “Time Wise”, Amantha Imber has a short chapter whose title alone gleams with good sense. It is called “Why you need to say ‘no’ to coffee meetings”. That is splendid advice for anyone who can identify with the following situation. Listen to this story. Enjoy more audio and podcasts on More

Last summer European leaders began hearing a huge sucking sound. The source of the din? The Inflation Reduction Act (IRA), a 725-page doorstopper of legislation passed in August to speed up American decarbonisation. Europe’s budding clean-tech industry, they feared, would be hoovered up across the Atlantic by the promise of handouts, which amount to around $400bn over ten years. To stop this from happening, some EU politicians argued, the bloc would have at the very least to match the IRA’s sums.So far the noise has turned out to be mostly in the politicians’ heads. Worries about a green exodus, bordering on panic in some quarters, have subsided. When the continent’s heads of government gathered for a summit last week in Brussels, they did not shower billions of euros more on the EU’s greening efforts—which are already, it turns out, comparable to the IRA in their generosity. Nor did they (for the time being) further water down rules against state aid to favoured businesses, which would have given freer rein to member states keen to splurge. Instead, they focused on making the system for doling out this money more efficient. This is music to the ears of Europa SA. In the eyes of its European fans, the beauty of the IRA is less its size than its simplicity. Rules are the same all over America. Getting tax credits, grants or soft loans will be straightforward provided a firm meets certain criteria, such as investing in one of the targeted sectors. The law sets aside sums for specific technologies, which can create markets, such as solar energy, carbon capture and storage and “green” hydrogen, made from renewable power (see chart). Producers of such hydrogen, for example, can get tax credits of up to $3 per kilogram of the gas.Replicating this set-up exactly would be unthinkable in Europe. The EU may see itself as an ever-closer union, but taxes are still a national affair, which rules out continent-wide tax incentives. If member states want to institute their own credits, or other forms of subsidies, they typically need the approval of the European Commission in Brussels, whose job it is to ensure a level playing field in the EU’s single market. To the resulting cacophony of national schemes, the EU has in recent years added a few bloc-wide grant programmes, such as InvestEU and Innovation Fund, to support clean tech.The upshot is ear-splitting, particularly for smaller green-tech firms in need of funds to scale up their projects, says Craig Douglas of World Fund, a venture-capital firm, who has a long experience in dealing with the EU’s subsidy bureaucracy. To have a chance at tapping one of the many pots, startups often have to hire pricey consultancies to help them write grant proposals. “We would need at least four people full-time to figure this out,” explains Vaitea Cowan, co-founder of Enapter, a maker of electrolysers, machines that produce hydrogen. Once an application is filed, it often takes months, if not years, before a decision is made. In the case of Plastic Energy, which recycles plastic waste, it once took so long that “we had to file again because the delay made us miss a deadline”, reports Carlos Monreal, the firm’s chief executive. And decisions tend to come without explanation. “It’s a black box. There should be a dialogue,” says Henrik Henriksson, boss of H2 Green Steel, which is erecting a steel mill in northern Sweden that is powered by green hydrogen. The EU’s green subsidies are also often poorly targeted. Jules Besnainou of Cleantech for Europe, a lobby group, points out that most of the European money does not go to the continent’s startups, which tend to be more innovative, but to big established firms, which do not always need government support.The commission’s draft “Green Deal Industrial Plan”, unveiled on February 1st, tries to deal with these shortcomings. The plan is meant to simplify the EU programmes and streamline the approval of national green-finance tools in Brussels. It proposes an “administratively light” auction, the winners of which will receive a premium, based on their bids, for each kilogram of renewable hydrogen produced over ten years. The scheme will offer incentive to the tune of €800m ($860m). The IRA has clearly shocked the EU into thinking harder about its green subsidies, says Jeromin Zettelmeyer, who heads Bruegel, a think-tank in Brussels. That may be so. Still, those who have read the eight pages dedicated to “speeding up access to finance”, which mention no fewer than a dozen different acronym-rich programmes, may be excused for not holding their breath. Claudio Spadacini, CEO of Energy Dome, an Italian firm which uses liquid carbon-dioxide to store energy, approves of the EU’s moves but still hopes to take advantage of the IRA. Ms Cowan of Enapter, whose firm has just built a factory in Germany, is getting lots of calls from American state governments since the IRA was passed. “They are rolling out the red carpet,” she says. Whoosh. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

PERHAPS NO COMPANY embodies the ups and downs of Chinese big tech better than its biggest tech firm of all—Tencent. Two years ago the online empire seemed unstoppable. More than a billion Chinese were using its ubiquitous services to pay, play and do much else besides. Its video games, such as “League of Legends”, were global hits. Tencent’s market value exceeded $900bn, and the firm was on track to become China’s first trillion-dollar company. Then the Communist Party said, enough. Xi Jinping, China’s paramount leader, decided that big tech’s side-effects, from distracted teenagers to the diversion of capital from strategically important sectors such as semiconductors, were unacceptable. Tencent was, along with the rest of China’s once-thriving digital industry, caught up in a sweeping 18-month crackdown. With regulators declaring video games to be “spiritual opium”, and barring under-18s from enjoying them for more than three hours a week, Tencent’s new titles were held up by censors. It was forced by trustbusters to tear down the walls of its super-app to let other payment processors in. Last year it sold its stakes in JD.com and Meituan for a combined $36bn, in part to shore up its balance-sheet but possibly also to assuage regulators’ concerns about its ubiquity. To make matters worse, Mr Xi’s draconian zero-covid policy infected Chinese consumers with a bad bout of thrift. In the third quarter of 2022 Tencent’s revenues declined by 2% year on year, its worst performance on record. By October its market capitalisation had collapsed to less than $250bn. These days things are looking up for China’s internet firms. Shoppers are “revenge spending” their way out of zero-covid gloom. The government’s clampdown on tech seems to have ended: regulators are easing off the companies’ old businesses and giving them more room to toy with possible new ones, from short-video entertainment and cloud computing to artificial-intelligence (AI) chatbots. And Tencent, whose market value has doubled to nearly $500bn in the past three months (see chart), is once again the embodiment of the changing mood. If you want to understand big tech’s new normal, and what it means for the future of China’s digital economy, look to its humbled champion.Tencent has no equivalent in the West, or anywhere else outside China. It is part Meta, part PayPal, part Epic Games (in which, as it happens, Tencent owns a big stake), with a bit of Amazon and SoftBank thrown in (Tencent offers e-commerce and cloud services, like the American giant, and, like the Japanese one, has made hundreds of tech investments globally). The disappointing third quarter notwithstanding, it is expected in March to report annual sales last year of more than $80bn. Roughly a third each comes from gaming, business services (which include payments, e-commerce and cloud computing), and social media and advertising. Its pre-tax profit is expected handily to exceed $30bn. If you exclude banks and energy companies, which had a bumper 2022, only a handful of firms in the world did better.The linchpin of Tencent’s riches is its WeChat super-app. Companies around the world have for years attempted to ape its astute marriage of pay (the transaction economy) and play (the attention economy). Few have succeeded in doing so as seamlessly as Tencent—and none on anything like the same scale. Last month’s lunar-new-year celebrations are a case in point. During the weeklong festivities WeChat users sent loved ones 4bn digital hongbao (red envelopes that in the real world come stuffed with cash), and more people tuned in to the annual new-year gala on WeChat’s newish Channels video platform (190m) than on Douyin, TikTok’s popular Chinese sister video app (130m).The new-year blowout hints at where the company is headed. The rapid rise of Douyin has, like that of TikTok in the West, pushed digital life towards short-video sharing. In the past year the average Chinese spent more hours on such platforms than anywhere else online. Those platforms overtook instant messaging in 2020. Short-video apps are becoming the centre of China’s attention economy—and of its digital-ads business, which generated $35bn in sales in the third quarter of 2022, according to Bernstein, a broker. Between July and September short-video platforms claimed about a quarter of those ad dollars; their ad sales grew by a brisk 34%, compared with a year earlier. Tencent has a shot at capturing a slug of that growth. The ranks of Channels users trebled last year, the company says. Although it declines to give a total figure, its new-year-gala streaming tally suggests they now number in the hundreds of millions. The company could bring in another 30bn yuan ($4.4bn) in ad revenues within a few years, reckons Robin Zhu of Bernstein, mainly at the expense of Kuaishou (which Tencent part-owns but may consider offloading) and Bilibili, another similar service. Although like Douyin it occasionally hires big names to draw in new viewers—for example the Backstreet Boys, an American pop group who entertained 44m fans at a Channels concert last June—Tencent has adopted a more ecumenical approach to talent. Content creators with as few as ten followers can get a slice of the platform’s ad revenues. On Douyin, they need 10,000 fans to start earning money this way. Tencent hopes that its strategy will attract more up-and-coming creators, more viewers—and more advertisers. The company is reorienting other parts of the WeChat economy around Channels, too. Most notably, it is equipping the platform to enable “social commerce”. This peculiarly Chinese form of consumerism, which combines live-streamed entertainment with shopping, is expected to generate some $720bn-worth of transactions this year. Here, too, short-video apps are taking market share from incumbents, such as JD.com and China’s biggest e-emporium, Alibaba. Tencent used to steer clear of this business, perhaps worried that its entry would destroy the value of its lucrative stake in JD.com. With that stake no longer on its balance-sheet, Tencent has appeared much more willing to try its luck in e-commerce. It will not disclose how much money changes hands on its e-commerce platform. But, it says, the figure ballooned nine-fold, year on year, in 2022. WeChat Pay takes its usual 0.6% cut from each transaction. And despite the government’s edict on letting in rival payments systems, most transactions on WeChat involve WeChat Pay: both Tencent and Alibaba, which operates the other popular service, have made cross-platform payments possible but cumbersome. The shift to Channels is especially crucial for Tencent. The government’s anti-gaming stance has made it urgent to look elsewhere for growth. Pony Ma, Tencent’s founder, recently described Channels as “the hope of the company”. Its recent success suggests that this hope might not be forlorn, and Tencent’s share of revenues from its non-gaming businesses has been edging up. But to thrive in the new normal, where the government has put limits on some digital activities, and stands all too ready to regulate further, Tencent will have to deal with three challenges—as indeed will China’s other digital giants. The first of these has to do with ensuring a company culture that is nimble enough to adjust to the new reality. As tech founders go, Mr Ma is low-key and laid-back. This has empowered subordinates, such as WeChat’s creator, Allen Zhang, and led directly to many of Tencent’s successful businesses. But it also introduces friction when those subordinates have different ideas. Mr Zhang, for instance, has long resisted the app’s encroaching commercialisation, fearing that it will spoil the user experience. As a result, WeChat’s home screen has remained unchanged for a decade and accessing videos on Channels requires two taps—not a chore, exactly, but a drag compared with Douyin, which starts streaming clips as soon as a user opens the app. The same resistance to change explains why the e-commerce operations, too, will be rolled out only gradually, notes Clifford Kurz of S&P Global, a research firm.Any foot-dragging could prove a problem, considering that tech firms will find themselves competing with each other more—the second challenge. The authorities’ tech crackdown has bulldozed the playing field in swathes of the digital economy. This forceful levelling is creating new rivalries. Meituan is pushing from its original patch of food delivery into ride-hailing and e-thrift-stores, which have hitherto been the preserve of rivals such as Pinduoduo. Douyin’s owner, ByteDance, will soon launch a food-delivery service of its own and is experimenting with a messaging app that looks strikingly similar to WeChat. Alibaba, Tencent and Baidu, China’s biggest search engine, are all developing AI chatbots similar to ChatGPT, whose humanlike conversational powers have beguiled Western internet users of late.The last thing that could trip up Tencent, or its rivals, is politics. Although regulators have declared the tech crackdown over, the party remains a spectral presence. The state is taking small stakes in subsidiaries of the biggest tech titans, including Alibaba and, reportedly, Tencent. As Sino-Western tensions mount, closeness with the state could jeopardise foreign earnings, such as Tencent’s profitable international gaming business. At home, meanwhile, cyberspace, media and antitrust agencies have gained new powers—and, notes Angela Zhang of University of Hong Kong, are willing to wield them. Censorship, always part of the Chinese online experience, is intensifying as Mr Xi’s strongman rule becomes entrenched, which could mean more delays to Tencent’s games launches. And the danger of the party paralysing a company’s growth is ever present. On February 9th share prices of Chinese AI firms fell after state media warned that “some new concepts” (like chatbots) were getting too much attention. Short videos have so far been spared the party’s rod. Critically for Tencent, they face fewer restrictions than games. But this could change if Mr Xi concludes that being glued to Douyin or Channels instead, which is how young erstwhile gamers spend two-thirds of their time, is not conducive to moulding good communists. In his public statements Mr Ma has repeatedly stressed how Tencent’s universe of apps “served society” and “assisted the real economy”. Such words should be catnip to Mr Xi and his cadres. Investors, too, are once again purring. But greater competition and fickle government is likely to constrain Tencent’s prospects for years to come. In today’s China there is no room for consumer-tech winners—only survivors. ■ More