Arjun Appadurai conceives globalisation as a process of complex and contested dynamics that cannot be captured in a binary fashion (such as homogenisation vs. heterogenisation) but in fact is animated and constituted by flows in the five ‘scapes’: ethnoscape, technoscape, financescape, mediascape and ideoscape (Appadurai, 1996). Different ‘scapes’ are constructs that characterise multiple sectors of global flows while highlighting their fluidity and irregularity. The ethnoscape describes the movements of persons and the technoscape is the technology that moves across boundaries. The financescape is the disposition of global capital, which moves at a rapid speed that is often hard to follow. The ethnoscape, technoscape and financescape constitute the political economy pillars of globalisation in contrast to the production and dissemination of information (mediascape), images and ideologies (ideoscape). Therefore, globalisation encompasses different dimensions, and is shaped by the constraints that exist in the different scapes. Furthermore, Appadurai’s approach to globalisation emphasises disjunctures between different scapes and in different historical, political and cultural contexts, rather than seeing globalisation as a simple, all-powerful force wiping out and assimilating local and national differences. This paper, in particular, focuses on the financescape of the globalisation process of Chinese internet corporations, looking at finance and professional advanced business services (FABS), banks, asset management companies and offshore jurisdictions – all part of the global finance network that according to Coe, Lai and Wójcik’s (2014) working definition, plays an instrumental role in forging and deepening Chinese internet companies’ connection with the global capital market. This tight nexus formed between global finance network and internet companies is not only an expression of the increasingly globalised development in companies’ business expansions, but also are critical manifestations of the increasingly financed character of media and communication, in general.

Since the late 1970s, the Chinese state has gone through radical socio-economic transformations, especially with Deng Xiaoping’s market reforms, which combined market relations, substantive linkage with transnational capitalism and with its concomitant consumer culture (Zhao, 2007). ‘Reform and opening up’ and ‘going out’ are two important strategies China embarked upon in its globalisation process. ‘Reform and opening up’ refers to the 1978 economic reform to adjust the structure of the economy while the ‘going out’ policy was an effort initiated in 1999 by the government to promote Chinese investments and corporations abroad. Subsequently, China’s accession to the World Trade Organization (WTO) in 2001 signalled the country’s accelerated efforts to re-integrate into the transnational capitalism system. Within this context, the power of the market has been increasing in relative importance to older political imperatives for Chinese media (Hu, 2003). Chinese media have undergone a two-stage capitalisation process: the period of marketization from 1987 to 2001, where the state decreased financial support and increased competition, and secondly the waves of conglomeration from 1996 to 2001, where the government attempted to restructure media industry through media conglomeration and rampant promulgation of media policies (Hu, 2003). Seen from a transnational and transcultural political economic perspective, the national-centric reorganisation of the Chinese communication system since the early 1980s according to market logic, constitutes an integral part of the global restructuring of communication systems under the neo-liberal logic of capitalist development and the formation of a truly global communication system (Zhao, 2003).

Globalisation has myriad expressions in different media sectors and thus is far from a monolithic process as it unfolds across Chinese media landscapes. The state still retains strict controls over licensing and ownership of news production, broadcasting and basic telecommunication services and operates gatekeeping over who is allowed to enter and participate in these markets. News production is in the firm hands of government authorities whilst control over value-added, non-basic telecommunication services is relatively relaxed and liberated according to WTO’s Basic Telecommunication Agreements and General Agreement on Trade in Services. This media regulation landscape resonates with the fact that although Chinese media governance has seen the transformation to a decentralised mode of governance that incorporates an increasing range of actors other than the state, globalisation is uneven and its effect is felt differently across different media sectors. As Hafez (2007) demonstrates international news reporting is the least globalised sector while film and entertainment is the most globalised. We can observe a similar pattern in China.

With media reform underway in the 1980s, the state’s withdrawal of subsidies and the introduction of foreign investment has installed and reinforced profit-seeking logic into media organisations. Before China’s accession to the WTO, media development in China underwent significant commercialisation and commodification, as Yuezhi Zhao (2008) states: ‘the most important change in the Chinese national communication system has been its commercialisation and its transformation into a platform for capital accumulation’ (149). Globalisation and the intensification of competition has unleashed changes across different media sectors, the most unique creation being the ‘national champions’, which are state-owned enterprises operationalising huge economy of scale through conglomeration, merger and acquisition. The financialisation of national champions, such as Xinhuanet (Xin, 2017) and China Mobile (Wójcik & Camilleri, 2015) exemplifies the pragmatic approach that Chinese government takes to media reform, which is to absorb private capital and western know-how whilst maintaining a firm grip on ownership and political control (Huang, 2007). As Michael Curtin writes: ‘the media revolution that has swept across Asia since the 1990s is often characterised as a technologically driven phenomenon. At a deeper level, it has been animated by a multifaceted neoliberal political project and economic globalisation (Curtin, 2017, 1378).’ The rapid commercial development of the internet in China can further attest to this argument.

The internet in China not only develops rapidly under the state’s accelerated economic liberalisation and reform process but also provides impetus fuelling the nation’s re-integration into the global, both economically and culturally. In fact, many banks and foreign enterprises in China spurred and drove the demand for high speed information exchange and transfer, providing a propelling force for the initial build-up of internet infrastructure (Mueller & Tan, 1997). Culturally speaking, the Chinese internet, argues Guobin Yang (2012), is a fitting metaphor for a China caught between national anxieties and global aspirations as the propagation and popularization of the internet in China gives birth to unique localised culture and experience. With stringent censorship mechanisms in place, boundary crossing and transgressing on the Chinese internet constitute the actual experience of average internet users in China (Yang, 2012). As a result, internet users have grown increasingly adept at using creative expressions (Lugg, 2013; Meng, 2011) and adopting various technical skills such as virtual private networks (VPN) to circumvent official censorship.

Chinese internet companies, on the other hand, are also adept at capitalising on elements of Western culture to advance their own commercial interests. For example, Taobao, an e- commerce site owned by Alibaba, launched a marketing campaign in 2015 just ahead of Valentine’s Day Weekend. Together with gay dating app Blued, Taobao held a three-day ‘We Do’ contest sponsored by a bed linen manufacturer, shortlisting 20 same-sex couples from more than 400 applicants. Based on 75,000 votes, seven same-sex couples were selected winners from the competition and awarded prizes of a weeklong wedding and honeymoon package to get married in California (Tso, 2015). Alibaba’s marketing campaign meticulously blended product promotion, consumerism, corporate social responsibility and same sex marriage together, consecrating the West as ‘gay heaven’ by providing contestants with opportunities for ‘boundary crossing’ – to be legally recognised as married while such an opportunity is still illegal in China. Aside from the much-studied cultural scape, it is important to remember that globalisation does not just facilitate neoliberalised free trade, it also frees international financial markets (Davis & Walsh, 2017, p. 33). Although less ink has been spilled on the dynamics between internet development and the global financescape in the Chinese context, elsewhere critical media scholars have clearly drawn clearly a linkage between capital and new media technologies. For example, Carlota Perez argues that historically, financial capital has always animated technical changes from an initial financial frenzy to the formation of a possible crash, to a wider dissemination and distribution of the technology to the society (Perez, 2002). Through historical examinations of how media corporations develop in conjunction with larger dynamics of capitalism, Scott Fitzgerald (2012) argues that what is historically significant recently is the extension of a unified and ubiquitous capitalist basis to the field of communications (31). In essence, the idea that the industrialisation of media through the introduction of new media technology and mass production and consumption requires greater financial underpinning is well presented by both critical and mainstream political economy scholars (see for example: Fitzgerald, 2012; Murdock & Golding, 1973; Winseck, 2011; Almiron & Segovia, 2012).

Close harmonies between capital and internet prevail when looking back at the commercial development of the Chinese internet. For example, publicly-listed Chinese internet companies were swamped in the dot com bubble in the 90s. Sina and China.com, (then owned by Xinhua News and AOL) went for stock market listing at the apex of the financial hype. The opening price of China.com rose from $20 to a high of $66 on its first day of trading, making the company valued over $1 billion USD (Sloan, 1999). Sina’s stock price also rose nearly 22 per cent. The bursting of the bubble trickled down to Netease and Sohu’s flat debut on NASDAQ while the stock prices of Sina, Netease and Sohu all fell below the $1 mark in 2001 (Tai, 2006). This episode of valuation up-and-downs of Chinese publicly traded internet companies shows how the global financial market is closely intertwined with internet businesses through overseas listing. More recently, the frenzy of ‘internet finance’ has been on the rise, with Chinese financial news touting and propelling the deepening of the financialisation of the Chinese economy and culture (Wang, 2017).

In China, lack of investment is a problem that plagued internet development from its early stage (Zhou, 1997; Hong, 2017b), yet it is home to some of the world’s largest internet companies. While China’s large population is one reason that blesses Chinese internet companies with a large economy of scale, the role of foreign capital investment in fuelling the commercial uptake of internet in China is often overlooked. Nonetheless, critical media scholars have highlighted the converging characteristics between Chinese and US internet companies, where the integration of monopoly-finance capital and the internet represents the dominant tendency of the global capitalist system (Foster & McChesney, 2011). Concentration of market power in the hands of a few giants rings alarm bells both in the US (Foster & McChesney, 2011) and China (Xia & Fuchs, 2016; Jia & Winseck, 2018). Bingqing Xia and Christian Fuchs reveal the power wielded by the BAT (Baidu, Alibaba and Tencent) in sweeping up many start-up companies in China into their pockets in order to accumulate capital based on financial rather than productive accumulation, which further stimulates internet finance bubbles (Xia & Fuchs, 2016). All these studies call for a close examination into how global finance networks and capital simultaneously fuel and limit the development of the commercial internet in China. The following analysis systematically examines the role of investment capital, financial networks and actors in the globalisation of nine dominant Chinese internet companies.

This paper examines the relatively under-studied aspect of the globalisation of nine leading Chinese internet companies from the perspective of Appadurai’s ‘financescape’ and demonstrates the formation of an increasingly tight nexus between global finance institutions and networks and leading Chinese internet companies since the 2000s. Investment banks, venture capital funds, as well as Silicon Valley tech know-how have in large part contributed to the founding of Sina, Sohu, and Netease. When capital was lacking domestically, the founders of these companies benefited from foreign initial investment through interpersonal ties they cultivated when working or studying overseas. Goldman Sachs, for example, has poured money into Sohu, Netease and Sina in 2000 (Vanderklippe, 2014). Secondly, these nine internet companies all launched their global pursuit of capital through share issuance and stock listings, with the critical help, again, of foreign investment banks, such as Goldman Sachs and Morgan Stanley as underwriters. In the IPO process, they fostered close relationships with global financial institutions and FABS. To further bypass national restrictions of foreign ownership for value-added telecommunication services, all nine companies deployed a VIE structure, which enables them to access a large pool of foreign capital without relinquishing control over company operations. This corroborates a previous study of the globalisation patterns of mainland firms, that showed that Latin America, the British Virgin Islands and Cayman Islands accounted for 81.6% of China’s non-financial outward foreign direct investment (Yeung & Liu, 2008). Finally, financial institutions and FABS wield structural power in these companies by owning a significant portion of shares issued, as well as through the election of board members.

Concomitant with recent policy changes, there are three main takeaways that can be drawn from the analysis. Firstly, the engagement with and embeddedness within global finance networks means the deepening of the commercialisation and the capitalisation of the internet in China and it reaffirms the important role the internet and ICT carries in China’s reintegration within global capitalism through communication, as Hong (2017) and Zhao (2007) argue. ‘Monetisation’, the hot pursuit of profit and ‘overseas listing’ has been the talk of the town and is emblematic of the zeitgeist of internet entrepreneurs in China, especially after Premier Li Keqiang put forth the Mass Innovation and Entrepreneurship (大众创新, 万众创业) guideline in 2014, which called for more people to start science and technology businesses to ‘transform their talent into productivity’ (Xinhuanet, 2015). However, the frenzy of different variations of the sharing economy in China, such as sharing bikes and sharing gym pods, have hardly proven their economic viability. Consumer capitalism, as well as mass entrepreneurialism, has been called upon and touted to users of the internet in China to consume and to be the saviour of stagnant national economic development (Meng & Huang, 2017). Officialdom has embarked on commercialisation and consumerism of the internet as technical solutions for economic stagnation and many social ills (the social credit score system, public service offerings, rush-hour congestion problems, the rejuvenation of state-owned businesses), which are inimical to much of the democratic potential of digital communication (Foster & McChesney, 2011). Commercial development and success of the internet in China is in no way, contradictory to political control.

Secondly, by showing the specific ways internet companies in China are wired to global finance networks, this paper challenges the popular perception of the Chinese internet as an insular intranet, which is politically contained and enclosed via means of censorship, blocking and filtering. On the contrary, when we examine the flow of capital, these nine Chinese internet companies, as well as many others, are deeply plugged into global finance networks and expanding outward. Compared with what took place in the early 2000s, where transnational media conglomerates made their moves to tap the Chinese market through joint ventures,4 the recent development of Chinese internet companies signals a shift in the direction of capital flow as they launch rampant merger and acquisitions activity and investment into foreign internet companies (for example, Cheetah Mobile’s 57 million acquisition of News Republic, Alibaba’s $4 billions spending in M&A since 2012 and Tencent’s $8.6 billion acquisition of Supercell games). Similar to other globalising mainland firms, joint ventures and acquisitions are the preferred modes of entry into foreign markets (Yeung & Liu, 2008).

Thirdly, analysis shown here prompts us to rethink the state’s role in conjuring up transnational capital when re-integrating into the transnational capitalism system. Yu Hong (2017) noted in her study how state interests have come to merge with those of private business and the state-business alliance shapes policy-making process: ‘private cyber giants … have gained considerable political influence, have parlayed into a cyber-business-friendly legal and regulatory approach’ (1499). In the case of these nine Chinese internet companies, the reformed Party state and transnational corporate capital have converging interests, that FABS and offshore jurisdictions have become the strange bedfellows of the Party and ‘capitalist tools in socialist hands’ (Wójcik & Camilleri, 2015). The analysis in this paper is limited to these nine companies but for future research, big internet businesses and state-business relations will be important in grasping the power dynamics of the Chinese internet.

A recent shareholder upheaval at Sina illuminates the perils of shifting power relations. Owning 3.1% of Sina, U.S hedge fund Aristeia Capital waged a proxy war at Sina, nominating two individuals for election to the board of directors and urging a potential merger with Weibo to increase returns to shareholders (Sina Corporation, 2017). Although Sina has quickly responded to ward off Aristeia’s demand, this example shows that once beholden to share and bond investors, corporations are thus influenced to behave in ways that suit those investors rather than doing what is best for companies themselves and multi-stakeholder economies (Murdock, 1982). Under the command of capital investors, Chinese internet companies have transformed into platforms of capital accumulation on a scale unprecedented before. However, as capital market reforms were brought to the agenda in the building up of China as a cyber superpower, the Cyberspace Administration of China and the China Securities Regulatory Commission in March 2018 jointly issued a guiding opinion on promoting capital markets to fund and finance domestic firms and ‘to increase party-state influence over domestic tech companies at a time when private companies are the drivers and foreign investors reap much of the benefit’(Laskai, Triolo, Lu, & Sacks, 2018). How these overseas-listed Chinese internet companies will react to these policy changes remains to be closely examined. But one thing can be sure, with capital running the show, the Chinese internet is not as insular as many would imagine.