Grubstakers - Episode 167: Ma Huateng

Episode Date: June 2, 2020

Boy Howdy it's Episode 167 of Grubstakers where we profile Chinese billionaire Ma Huateng, creator of Tencent, the largest social media and game company you've never heard of. A de facto arm of the state surveillance apparatus, Tencent has their fingers in everything from the Chinese social credit system to Fortnite. We discuss the protests at the top, so if you want to skip ahead turn your dials to 0:17:40.

It's the kind of thing that makes the average citizen puke. I look at this system and say, yeah, you know, what's going on? I don't know anything about this man except I've read bad stuff about him. And I don't like, you know, I don't like what I read about him. We have more than just one coin. We create the world around this coin. Come. Invention.

Come. Come. Five. Four. Three. Two. The evil has gone. Hey everyone, welcome back to Grubstakers.

I'm Steve Jeffries, and I'm joined by my fellow hosts... Andy Palmer. Yogi Poliwal. Now, we're in the middle of another of America's authoritarian crackdowns right now, fueled by racism. We've got an episode for you today, which may seem at first to be a bit far removed from George Floyd, the Minneapolis Police Department, and racist police brutality in this country. And I suppose it is in some respects. But also, our subject for today, Ma Huateng, founder of the software and media company Tencent in China, has devoted much of his life to developing and marketing systems,

which ultimately have served to further the authoritarian aims of his country's government the chinese communist party and like it at the end of the day that makes life a lot harder for chinese workers and so i thought that we would have some gold fashion proletarian internationalism today where we support workers in both countries and say that there maybe there's a shared struggle there against their respective authoritarian enemies. So in that sense, they're related, I think. And so we're going to get into some pretty serious instances of censorship, behavior modification, using Tencent's software in cooperation with the government to help shape Chinese society.

And if you just stay with us, you'll see how this can actually be tied into some of what police departments do in our country in order to monitor people's whereabouts and what they would like to do more of, like with, say, Google's u.s company but before we get into all of that i just thought maybe we could each say uh a little bit um about our feelings about what happened with the the george floyd protests uh andy i think you were involved in the protests mainly. I was mostly just watching them on livestream, but you're actually on the ground. Yeah, yeah. I was at two of the Brooklyn protests, which, muchclays Center but I didn't really um I didn't really see I heard things but I was like positioned behind a paddy wagon I was

actually um when I was at that when I first showed up to it like because of the virus I was like trying to stay away from people so I was at kind of the outer edges and I was at that, when I first showed up to it, like, because of the virus, I was, like, trying to stay away from people. So I was at kind of the outer edges. And I was also kind of near the Guitar Center, which I think was, like, a subconscious decision where if the looting started, like, I would finally get a Fender Mustang. Sure. finally get a uh fender mustang sure but i mean the thing is like if they started burning it i couldn't let it go to waste um and of course i'd also have to get a gig bag and it'd be a whole ordeal but no uh so yeah i was i was at the um i was very briefly at the um uh friday uh protest which from my perspective was very peaceful um but yeah and then i was at the saturday protest in flatbush which uh you probably saw footage of on the news that one

also started extremely peaceful um it was i mean it was the first few hours were pretty much indistinguishable from, you know, those pussy hat protests that we all remember from 2016, 2017. And then, yes, it started to get darker. The cops started trying to break up the group. They would send riot police in to kind of segment apart the protest, which was at that point just a march. And, uh, it was, it was very, uh, surreal for a while. Like at one point I left to just go to the bathroom because the protest was near where I live. And I came back and, um, what had been a march became a stand down with the riot cops were like the protesters were standing in a line facing the riot cops. And I think people were just kind of almost waiting for something to happen.

And there was one guy who was just clowning on all the riot cops making fun of one guy for having tiger woods gloves holding his baton he made fun of another lady saying like hey did you put your did you put those eyelashes on for this um called one of the cops a karen and uh said he was going to call the cops for her uh and then but then like as uh the group kind of moved away uh some guys started uh smashing up some police cars with um one of them it was pretty funny was using a the police's own riot shield to smash a police van um and then once that happened kind of all hell broke loose the cops started charging that people would stampede um someone set off a firework in the crowd um and by the end of the night uh people were forming like human blockades blocking cop cars from like flanking the protests

and it got to the point where the cops were trying to kind of push their way through lines of people who were like using their bodies to block the car and the cops would get out of the car and just like shove and hit people and the people started hitting back and um would throw like chunks of concrete at the cop car um push carts like things like that until they actually won the fight with the cop car and the cop car sped off um but it was yeah it was it was something else uh still i don't know how much this is going to make it into the episode but i'm still processing it um is it the most violent you've ever seen a protest get?

Yes, for a protest. It was the most violent night that I'd seen since I did New Year's in Belfast. But the thing is, the police presence in Flatbush and Brooklyn in general, it's hell.. Like they living in New York, you just get the sense that you're living in a police state. Like, you know, someone needs to get to their job, but they don't have any money and they hop the turnstile, you know, that could land them in prison. It's like, everyone was pissed off. There's a lot of talk about like outside agitators, but, um, I didn't see anyone who looked like an outside agitator. It looked like pissed off locals who were, and,

you know, it was, it was, it wasn't coordinated. It was just, you know, everyone's been losing their jobs, losing their rent money,

probably on the edge of eviction. You know, no one has anything to lose anymore. And so people are, you know, no one has anything to lose anymore. And so people are, you know, the and the cops are just the face of this oppression and people are just, you know, letting everything out at the place where the cops rammed those protesters standing in front of a cop car. That was somewhere else. But you knew that these cops wanted to do the same kind of thing. And they got close to doing it a few times.

But, yeah, it was crazy. And I'm still processing the whole thing. Yeah, I saw the video of a cop. And maybe the listeners have already mostly seen it the cop car driving forward into a barricade and the barricade pushing a bunch of protesters like really violently yeah and palazzo basically said well you know they shouldn't have uh surrounded the cop car but the cop car could have always like backed off yeah it wasn't trapped or anything. Some people were like, well, what if you were in the car and you thought you were going to die because you're surrounded?

And I'm like, well, he's not surrounded. Yeah, yeah. Like, de Blasio's been disappointing. But his statement about that was saying that the cops were justified like i i understand if you're a mayor and you shit on the cops you're putting your life in danger but it was so tone deaf he like continually gets cucked by the police yeah yeah like even when like he'll he'll go out of his way to protect them, and then some police officer will still say that he's a communist agent

meant to destroy the police or something. Yeah, they all still hate him. He's on the level of Bloomberg, basically, almost, in terms of his friendliness yeah yeah i mean they they probably love bloomberg because he let them go hog wild on people but um well that was andy obviously because uh they disproportionately stop whites too much and blacks too little right yeah we know this from bloomberg no yeah while people were setting up a uh barricade uh people yeah people were setting up like a barricade out of like trash cans and and dumpsters in the street to like block the cop cars so that they wouldn't

have to stand there themselves uh but while they were doing that i overheard some guys being like i'm sick of this bullshit and at first i thought he was talking about the protesters but then he just went on to say like man getting stopped searched pulled over killed i'm just sick of it and you know it was that was that was the attitude that you know so many people had yeah they can't forget that we're at basically 25 unemployment right now. Yeah. It is about Floyd's death, but it's about so many other things at the same time.

Yeah. I mean, there's about to be mass evictions. And that has to be eating away at so many people. And you know exactly who's going to be enforcing those mass evictions yep uh yeah uh yogi yeah i think that um at no other time in my life than for at least the last three months has the notion of profits over people been so apparent and with the you know white supremacists with you know rifles going to uh that courthouse i think it was a few weeks ago to compare to the peaceful protests going on it might not have been a courthouse actually but like i mean you know there is such a... Oh, yeah. Actually, it was a Subway restaurant. Which is a courthouse in Kentucky.

With everything going on right now, I think that the thing that's become most apparent is since we are in a subtle lockdown, people have nowhere to go with this information of police brutality and the reality of it. So whereas, you know, last year, these same vicious acts were occurring, but you got to go to work or you got to do this or that. And so you can kind of, you know, if you don't live among the communities that are suffering constantly because of this, you were able to shield yourself from mentally processing it. But when you see, you know, there's a nine minute video of a man putting all of his weight on another man until he is murdered. And the fact that there is any sort of debate on whether or not this guy is maliciously murdering another person or if he's just doing his job. I mean, it is horrendous.

And Killer Mike said some great things in this Atlanta town hall that happened, I think, two days ago. And in that, he just talks about how we watch this murder porn over and over again. And that is how I feel that all of these issues that are occurring become a bit of a pornography. Like Steven, you and I, we, we weren't in the protest,

but I'm sure you've seen so many of the protest videos, whether it be police, uh, brutalizing civilians to protesters breaking down windows to people that look like agents setting fire to that auto zone. I mean, like, it's literally porn. Like, I'm not, like, saying that, like, I jerk off to this shit or anything, but it's, like, it gets hooked in your system. And there's something about that that I can't necessarily put into words right now, but it is destroying us from the inside.

Obviously, I condone everything that's been going on with the protesters and the police force itself has had a reign that has terrorized the citizens of this country since their creation via the KKK. But I'm tired of watching destruction and retweeting shit because that's all I can do. And it's so frustrating. Yeah, I think part of it, like, you know, Yogi, you said you haven't been to these protests yet, but back in 2014, you know, you and in uh in the eric garner protests as well and i think part of the thing is you know that was that was six years ago and nothing has changed literally nothing has changed and obviously this has been going on you know you could trace it back

to rodney king and selma and you know way before that like you know nothing's you know maybe something's changed since selma but nothing's changed since rodney king like the the only thing that changes now there's more videos of these and you know with with all the videos people it's just a cycle where a dude gets murdered. There's a protest. Either there's a grand jury thing where the prosecutor just talks him out of it, out of an indictment. Or maybe they're charged and then acquitted because the prosecutor is not even trying. And it just keeps happening. And I think at this point people are seeing, you know, there's a moment here. And they're seizing that moment because it's a chance to drive things home.

You know, maybe we'll actually get real change. I think the cops are maybe worried about that because the main demand is to defund the police. And so, you know, they don't want to get laid off by, you know, all of us losers who are out on the streets. They don't want to become us. And so, you know, they're hitting people with their cars and shooting rubber bullets into people's eyes and spinning their batons into people's heads. And it's, I mean, it's hard to see where this ends, but they're not going to give it up willingly.

We should quickly mention uh sean couldn't be on this episode because he had to protect his several airbnb properties so uh our apologies for p mccarthy that's why he may be not seeing as many of his tweets he's brandishing a machete and a tommy gun in front of several Airbnb properties. Yeah, you might have seen his machete video on Twitter yesterday. That might sound excessive, but this is Florida, so he's just standing his ground. You guys want to move on? Yeah, I think so.

So with Floyd's death I feel like we we really depended on having some type of video of it occurring like imagine if there's no video and like someone saw it but they didn't have the video and couldn't share it on social media or like it was censored or something so like um as as many problems as there are with the social media in the U.S., at least that was able to pass by filters and people saw it. And then they acted. So like moving into the subject of our episode today, Mahua Tong. Also known as Pony for his love of the genuine track

So today's subject is a literal horse billionaire So his name is Ma Huatang He's also known as Pony Ma Why you ask? Because Ma, the family name, loosely translates to horse In English And even though Ma is quite a common name uh he decided to name himself pony because of it many ma's don't don't decide to do that that's okay that's okay but anyway um

so just to get into his bio ma huateng he was born on october 29th 1971 in guandong province in china he's 48 years old right now um his father ma chen shu worked to um early on he moved to he and his family to shenzhen and where he got a job as a manager of like a port authority facility i was trying to find more on his father it seems like he sort of grew up in like an upper middle class background but uh i think yogi has some more on that yeah i always check the gossip rags on our billionaire episodes and there's a website called celebfamily.com and it talks about uh this is a quote from the website ma was born into a privileged family and his father is a communist party member in china apart from politics he's also known to be very dedicated businessman

and friends with hong kong businessman lee ka shing ma's father has supported him from the very beginning of his career so i'm not exactly sure if that is referring to uh pony's father uh or if it's referring to uh pony himself but either way uh the billionaire class of china seems to hang out with one another yeah so he has like his father has party fairly close party connections i mean if you're like not everyone is a communist party member in china in the way that you would be like a democrat or something in the u.s it has you don't just get it so uh it takes political connections to work your way through the party infrastructure and obtain membership right you don't just get it you have to earn it it's not like herpes it's more like gonorrhea and once you have it you have it for life that's right i don't think i earned my gonorrhea

well you got a gas station that's a whole different story so ma hua ting is the ceo of ten cent now Tencent Holdings. It's one of the largest software media entertainment conglomerates in the world. He's one of the founders. But before all that, he had an interest in computers pretty early on. And his father ended up buying a PC for him pretty early in his life. Ma completed his schooling in Guangdong and he went on to study at university in computer engineering. One thing I found out was that at that university he changed his like records uh from the like he hacked into the computer system and changed the records and the dorm administration was not able

to figure out how he was able to hack that system so in some articles they refer to him as like the chinese uh mark zuckerberg but since he's older, shouldn't Mark Zuckerberg be the American pony? I think so. So he went to, oh, that university, by the way, is Shenzhen University. So he went to school where he lived. He graduated from Shenzhen

with his computer engineering degree in 1993, Bachelor of Science. His first job was with a company called china motion telecom development which was a supplier of telecommunications services and products um he was in charge of developing software for like uh pagers like internet pagers or like really early versions of um instant messaging gotcha so he reportedly earned about 176 a month which sounds like nothing but it's i don't know it's kind of a lower middle class to straight middle class wage for the time in china right right he worked for he then worked for shenzhen runjun communications co company in r&d work research and development um in a department that was like focused on internet calling services

um not like voice for voice chat gotcha which was like in the 90s that was really becoming a hot field. So along with four other classmates from Shenzhen University, Ma Huateng, he went on to co-found Tencent in 1998. And that's really where he pours in pretty much all of his waking hours into for several years after that but before we really get into it um with with ten cents um and you know in terms of his family from celebfamily.com it mentions the the woman that they believe is his wife,

but they don't know how many kids he has or if he does, how old they are. So he's a very secretive billionaire. So we could find his parents' names, but really not much other information outside of that. One video I found, which is the Secret of Billionaires series on YouTube, mentioned that his family came from a small fishing town i mean either

he's secretive or he also doesn't know how many kids he has it's embarrassed the man just likes to pump and dove yeah i mean i guess i should say from the outset that so he's like known to be like not a flashy guy like jack like jack ma so like the other the other chinese um software billionaire founded alibaba and like uh people outside of china often think maybe they're related because of their name but they're not right um but they're sort of like polar opposites ma is a very just a very common syllable in Chinese. I just learned from being bored in quarantine that if you want to ask a question, you end a sentence with Ma. And it works like a question mark.

Oh, interesting. Yeah. So personality-wise, they're like polar opposites um jack ma and ma huateng so ma huateng is supposed to be sort of low-key and very secretive about himself and his family um jack ma is sort of flashy and he's all about innovation and stuff. Whereas Ma Huateng has kind of a different... I was reading through a biography of his on Forbes, and he describes himself in a way that's really at odds with Silicon Valley people who are all about innovation and stuff. So he's always, at everything he's asked about,

like, what are your thoughts on the future of innovation? Or some stupid question like that where you can just go off in any direction you want. But he says, I think innovation is overrated. He has basically that answer in several... Well, it's in Chinese, so there's a couple different translations of what he meant.

But he usually says something to the effect of he thinks innovation is overrated and it's all about just execution, he says. And like, how well do you execute an idea? That's maybe refreshingly honest from a billionaire. I was like, you know, I don't know if I, I mean, I don't agree with what he means by execution, but I kind of agree with maybe the idea of like innovation has become such a buzzword in tech that it's almost meaningless. And like instead of like focusing on like, oh, who's the next genius who's going to think up something that changes the world? It's more about like just get a bunch of people together and do

something that people need well yeah when i was looking at lando lakes and to see why they changed their mascot in a lot of their interviews of the ceo she talks about how they need big tech to come in and innovate the dairy industry and like the problems facing dairy are pretty straightforward, and it's that people don't want to live where there are dairy farms and be dairy farmers, so farmers themselves are dying. The blue-chip corporations that own dairy, like Nestle and a few others, are harking bottled water sales as well as dairy sales. And so small dairy farms are going out of business to make

smaller retailers like land of lakes not have enough capital to be able to push their product but her answer to how to solve the problem is big tech coming in and it's just such a buzzword to make you think like oh they're actually doing something about it and it's like no that's it's not all about that it's about increasing your accuracy in terms of execution when it comes to making your product. Yeah, or finding ways to reduce costs. Like you don't need this many workers or something. Or at least you can get workers who are paid lower wages to use technology to help your bottom line or something. Something more mundane than it actually is

so like often like we've covered other tech billionaires who um if they do innovation at all it's to get it so you can justify having lower wages for people utilizing an app to do a task that's repetitive so like they still need workers they haven't replaced anyone it's just that they have lower paid workers indeed but that's a digression i guess i guess part of the strategy might be um that if you just constantly you know you, it might, I think part of the idea behind automation isn't just that by automating tasks, you replace workers, but you remove one job and create a new one,

forcing people to switch jobs a lot. And when jobs become that insecure, it's easier to drive down wages. Yeah. Yeah, there's like a labor discipline aspect to it's not it's not necessarily it doesn't necessarily mean that you lose a job period but you have to be constantly on the move so let's go into tencent and their innovations that they did or did not execute but mostly in their copycat games yes i already know my favorite game well so ma enrolled at shenzhen university got his computer engineering degree um he he worked a

couple jobs at a modest wage for a while um but he really was intent on starting his own company, and he was especially interested in internet instant messaging, which was in its infancy in the middle of the 90s. There are a few established brands back then. One of them was ICQ. I don't know if you guys use that one. I don't know what that is. It's kind of like IRC, which is another very early text-based

instant messaging system that you would use on dial-up. Gotcha. I started on AIM. That was my whole thing. For most people in the US, their first one is AIM. AIM was... it wasn't a copy of icq but it was um very similar to it so i wouldn't say it was a copycat there but icq was

developed by an israeli company in i think it was 1992 my introduction to IRC was like as a kid on message boards. Like the way people talk about message board culture on Twitter now, all the Gen Xers on message boards would talk about IRC. Like it was this lost culture. I was like, I was on there for just like a brief minute mainly well like my brother my oldest brother was old enough to like actually use it for like for real and then i would use it every now and then come on steven you weren't a young buck typing in asl and then doing cyber sex with randos and chat rooms come on bro yeah you'll get your wife is in the other room just let me live through you guys.

I bring up ICQ because Mahua Tang, a lot of observers say like, isn't what you went on to invent basically a copy of ICQ? And in fact, he did run up against that so ma huateng he got into his head that he wanted to launch something very similar to icq and it was going to be an instant messaging uh service built specifically for the mainland chinese market and he ended he unveiled in February of 1999, shortly after he created his company, Tencent, OICQ. And he marketed OICQ without any reference to ICQ. And eventually ICQ took him to court for it. And he had to change the service name to QQ and he would keep it as QQ for the remainder of the company's history so far wow and it looks very similar and they

weren't just arguing over the name they're just like it was he stole it was very similar intellectual property yeah he stole the IP and created the same message board and when they called him out about it he was like all right i guess i'll change the name on this shit yeah so like all they were able to get him to do is change the name uh practically speaking sure um i mean there might there might be some technical details that that they might have had to that i don't understand reading through the legal case but that's you know, the name is the big thing. It seems like if his approach was

just like if someone copied a Chinese program and you know, kept the same characters from the name, and then they got sued, they just deleted two characters and repeated the remaining one. Yeah, like it's a new name like a domain we're not nike nike we're kiki the company was not initially as successful as ma thought it would be

but after so like in its first three years it didn't register a profit which i guess is pretty par for the course for u.s tech companies now hey oh with the unicorn or the unicorn companies oh yeah but what so after he renamed the the service qq and after three years of kind of slugging it out with no profit to show for himself um once he was able to settle the legal thing with icq and its parent uh aol was the parent company of icq so indirectly he was also up against aim um he was almost off to the races pretty much in terms of securing money that's what a pony does goes off to the race, pretty much, in terms of securing money. That's what a pony does, goes off to the races. That's right.

He was broken in. That's right. They broke the pony downs. It's fast now. I don't know how horses work. He was able to secure some early funding from two venture capital firms in the the amount of 2.2 million in late 1999 so not that long after he debuted qq later on the south african uh investment media investment firm firm naspers they ended up purchasing 46.5 percent of a share of 10 cents in 2001 oh i should back up a bit so the name 10 cents that comes that's also like that means something different in

chinese and i have that it. There it is. 15 cents in Chinese. So it's the characters they use to represent it. Tang Shun. I think I got that right. That stands for the speed of 10,000 horses running.

And I'm like, the first thing that occurred to me was like, if it's more That stands for the speed of 10,000 horses running. Really? The first thing that occurred to me was like, if it's more horses, why would it be faster than just one? Right. But I see what they're going for. It's like thundering, you know, the thunder of progress really fast. It's like it's messaging at the speed of 10,000 horses so that's where the name comes from I mean I guess

I get it but for a man named Pony that calls his company after horses man's a real horse person yes so now that he has enough capital to

branch out a bit, and so this infusion of capital allowed Tencent to release a plethora of software from about the year 2000 to 2004. They have their instant messaging platform QQ that's been through a few different versions, and they're able to roll it out with less issues. They have their instant messaging platform, QQ, that's been through a few different versions. And they're able to roll it out with less issues. They invented this thing called Qcoin, which is like a payment system. Well, it's not a payment system. It's like a store credit system to buy games and and stuff on their right system and like in-app

currency type of yeah pretty much and which leads me actually to one of the main things they develop in this really early period is they start uh their video game business which like today it's huge but they really expanded very quickly early on. And so they founded Tencent Games, the division that's wholly owned by Tencent Holdings. And it was founded in 2003. And it's mostly online games. And it has... I mean, today it... It's crazy how many different companies they either own wholly or have a significant investment in.

Yogi? Yeah, from my research, I found that they owned, I believe, 5% of Ubisoft, 40% of Epic Games. They do Fortnite. I mean, they own all of League of Legends, I believe. You wouldn't presume how much of domestically owned video game companies have a portion of their companies owned by Tencent. Yeah, so they own Riot Games, which released League of Legends. That alone is huge.

So they also, in order to start out, they didn't, so they weren't developing games themselves so much in the first couple years. They were leasing rights to distribute games on their platforms from the South Korean company for like 2000-2002 and they're able to get enough traffic and money from that business to start developing in-house. Now was this all on WeChat when they were doing this? WeChat

came a little bit later. So Tencent Games was founded in 2003 and it has a couple early titles one is QQ Tong in 2004 Instant Games was founded in 2003. It has a couple early titles. One is QQ Tong in 2004, which is hosted on the social media platform of QQ. And it's like this online game that features Chinese mythological characters. Another one, which was much popular,

is called Dungeon Fighter Online which is a side-scrolling fighter game and a massively online RPG called Shunshian which was one of its first 3D, like a 3D RPG

and then of course just to summarize the gaming like it really exploded and eventually they you know they're they want to globalize a bit and get into western markets so they bought riot games and right right games developed league of legends and they they had a blockbuster of their own called Honor of Kings, which, like, I mean, I didn't know about it before, but it's actually the highest grossing video game of all time. Oh, wow. It's just enormous in China and a few other countries now, too. That's wild i mean like i remember during my research they basically say that tencent is the

largest video game manufacturer based off of the portion of the other companies they own but from the other games that they have in-house as well yeah so honor honor of kings is a huge cash cow for them and like the game itself but also like uh in-game you know uh purchases and stuff facilitated by Qcoin, so you can buy that. It sounds like a cross between every smartphone game that you get spam ads for,

just Honor of Kings, and then there's a very busty CGI princess being like, will you protect my honor? If you answer no to that your social credit score is just goes in the shitter like you can't you can't get airline tickets after that so i thought it would be worth a mention um so they have uh mean, all those games are successful. They also had some like very overtly just like kowtowing to the Chinese Communist Party games. And there was one that was released in 2017, which was just titled Clap for Xi Jinping, an awesome speech. And it's just all it is it like it will play it will find a random speech of xi jinping

and then you have to it's just how many times can you clap how hard can you clap for our leader it turns out the um the best clapper for mr g is is a gentleman named Eric Yu, who managed 1,489 claps in 19 seconds. What? What? You see, the key to appreciating Xi Jinping is to not just clap by tapping with one finger. You have to use all five fingers uh in rapid succession to to show your proper appreciation for the communist party unfortunately this game is not available on uh the apple store um so we can't show it you know we we skew communist and it's a kind of an insult that we can't show our true appreciation for the party

they they were working on a follow-up game jerk it for Xi Jinping but it never made it out of beta testing but it's good it's probably the best use of an accelerometer and a phone

yeah like it shows your heart rate and everything yeah do we It's probably the best use of an accelerometer and a phone. Yeah, it shows your heart rate and everything. Yeah. Did we mention that they also made Fortnite? You did not. They have a... So, Tencent Games has a 40% stake in Epic Games. And Epic Games made Fortnite, if I'm not mistaken. Right.

So... And they made a lot of their money from that for um you can buy uh special ways to string dance for g dab for g yeah um and it's important context that uh this was at the time this was right before they met to for the i think it's the 19th People's Congress planning session. And one of the things that they agreed on was increased focus and government money to develop internet companies. So the clap for Xi Jinping thing, had that in mind. Also, here's a quote from Eric Yu, the 25-year-old PhD student who is the champion of clap for Xi. He says, the game itself is quite silly. And after that sentence, the man was immediately beheaded.

So if you think about the ultra patriotic stuff that came out of America, like the first one I can think of that would come to mind, I mean, I guess there's there's like Call of Duty. And then there's the like those post 9-11 flash games where you have to kill Osama bin Laden. And it's like when you compare Chinese patriotism to American patriotism there seems to be a lot less killing in their games yeah yeah a little bit yeah like um they do have some shooters that I think the CCP sort of

uses in the same way that maybe the US did for some of those like in like in the early Iraq war years I thinkS. was using this game called Our Military or something. Or America's Army. Yeah. Yeah. They used that for recruitment.

For a while. And China has their own where it's like Hong Kong Protest Sniper. It's just like tag peaceful protesters. Yeah. I think that one of the things that shocked me the most was the invisible hand of Tencent in the video game industry, but also the fact that when it comes to movies or TV shows or even music, I'm going to watch and listen to things that I might not care for,

like someone else says, hey, let's go watch this movie, and it's not that great, but I'll watch it. But when it comes to a video game, I'm only going to play and finish games that I love. And in terms of Chinese propaganda being put into a video game, like that 5% that they own of Ubisoft makes it so that none of the Ubisoft games that come out ever have anything anti-China inside of them. I mean, like the thing we were talking about with Fortnite being 40% owned by Tencent, if Travis Scott and Kid Cudi in that Fortnite concert had a line being like, you know, Gigi Peng looks like Winnie the Pooh, suddenly, no, we're not doing this fucking

concert anymore. So the thing I wanted to get across to our listeners is the fact that although video gamers can seem relatively, you know, like nerds and losers. You only end up playing and finishing games that mean the most to you. And if you are, you know, loving a game and it has pro-China rhetoric or at least not anti-China, you are not necessarily stuck in that mindset, but, like, it cuts in deeper to your personality than a movie or a tv show could i think yeah yeah for sure if it sounds like we're beating up on china i mean i think we're beating up on the ccp and relating them to the u.s government as far as like their authoritarian tendencies really so is uh the intent of this episode that's what our handlers pay us to do

later on we're going to talk about uh some of the social media aspect and i'm i'm uh i want to mention a few things about how tencent maintains their monopoly in china so that's their video game business uh another major business line of theirs is WeChat, which is a communications platform, I guess. Initially, it covered voice chat and different forms of online communication. It really branched out to cover just about everything in Chinese society, as far as how you would interact with institutions and communicating with people.

It's pretty incredible. So one reason why WeChat has become so popular now, like it has a huge market share, is because life is basically impossible if you don't use it. So people can message their friends. They can make payments. They contact businesses. They order cabs they you can pay street musicians with their q a qr code

using wechat that's like they actually use qr codes that never took off here but it worked in china yeah i only use qr codes to find out when the next bus is gonna arrive yeah yeah and like the thing about it working in china is it's partially true it's also that it there's there wasn't an alternative that was approved by the chinese government to allow the people to use those functions as they wanted to yeah so like a lot of um the growth of wechat is partly endogenous to the company and just it's like it's an okay product i guess but then it's also because it simplifies a lot of the interactions people have with the government and like they're the latest people's congress voted to devote more fat more federal money uh central party money i guess to developing internet companies like ten cents and one of one of the strings attached to all that

money is they need to develop systems which can be used to power their, what's called the social credit system. And we've already joked about it a few times, I guess. But it's a system that is a behavior modification, sort of like, well, actually sort of like the your credit score here but much more expansive but same in the principle and that it tried to encourage you you're rewarded with more points if you do things that the party likes and you're you get subtracted points if you do things that they don't like and it can be something as simple as like um well i mean it sounds simple it's actually pretty crazy but if you if you record yourself or log yourself as finding a foul and gung person and trying to dissuade them from practicing their religious beliefs you'll get points wow fucked up so that's that's i mean i

call this it is a simple thing to do if you don't have any problems with doing that on an ethical on a moral ethical level but um rickard gervais's score is through the fucking roof whatever you think of the falun gong everyone hates him in the west now but his chinese social credit score is astronomical. He's paying dividends. So there's this social credit score, and the government contracted eight companies to help develop web apps and online platforms that make it easier for them to actually implement it. And Tencent was one of those companies and so you can use WeChat and a couple of other of its applications to help have your score be monitored

by the government and like they you know they add things for people things they like and subtract for things they don't and if you if your score drops low enough it's sort of like that black mirror episode where you don't get you don't get access to like infrastructure if it gets slow enough or the episode of community with meow meow beans yes and and mitch hurwitz is uh the star of a college sex romp. That's right. That's exactly right. So beyond the social credit score thing,

there's been human rights violations kind of leveled at Tencent, specifically WeChat. There's a human rights act, a Chinese human rights activist, Hu Jia, was reportedly jailed for three years on a charge of sedition due to voicemail messages she left with her friends that were screened by the Chinese Communist Party Internal Security Bureau. And so he's on the record saying, quote, I took a chance and assumed WeChat was relatively safe, he said. It's a new product and not developed by China Mobile or China Unicom. Two of China's, those are more state-controlled enterprises,

which have been monitoring my calls and text messages for over 10 years so he wasn't using those but he says but the guobao or the internal security bureau surprised me with their ability to repeat my words or voice messages verbatim though i'm sure i only sent them to my friends through wechat so some anecdotal evidence that the government is watching what activists do through wechat tencent is the company's biggest internet company and they they've declined most opportunities to comment on like what happened with this activist but they they eventually said just we have taken user data protection seriously in our product development and daily operations and at the same time like other international peers we comply with relevant laws same fucking thing facebook says yeah yeah it is oh yeah and like

they close it out with another really common thing where they say we comply with relevant laws in the countries where we have operations and uh if you listen to interviews with ma huateng himself he basically just parrots that so he's saying like uh like if someone will specifically ask him about like you've been you and your company have been accused of these human rights violations for monitoring on people's communications and reporting it to you know this to the government and then they end up taking them in uh what do you think about that and he's like well every country has different rules and you have to respect the rule of law in order to do business so we don't really have a say in this so we just have to operate based on whatever's rules are going on.

He has no power in this. He's the head of an enormous multinational company. Guys, just because I'm the captain of the ship doesn't mean I get to choose where it goes. He's like, it's out of my hands. In one article I saw, there were Tibetan

monks in Dharamsala, India, that were using WeChat to talk to one another and explicitly saying like, I know they're tracking my information, but it's convenient. What am I supposed to do? Like, this is the way I have to do just about everything. And in cases of like TikTok and Zoom, I knew that they were banned in China and previously I believed, oh, they're banned because they do user data mining and so the Chinese government might be like, fuck that noise. Tencent all the more enticing because were there to be any competition in any form of what Tencent does, then it would be a threat to the control that the Chinese government has over the corporation. So, you know, when I was telling my wife about some of the things that Tencent has done, she was like, wait, but is that stuff that like Facebook or It does. And I was like, yeah, but in this country,

we have the luxury of choosing whether Google tracks us or Microsoft tracks us or Facebook tracks us or Twitter tracks us. In China, you don't get that luxury. Only Tencent can track you. And if you want to choose another company, you shit out of luck. Though, I mean, what they were saying about like,

yeah, I know I'm being tracked, but it's so convenient so convenient i mean that is exactly what everyone said since the snowden revelations yeah like you know we know uh yeah i know i just don't care yeah like you know we we could all get on signal but it's kind of a pain in the ass like you know explaining to your 60 year old parents like how to download signal and install it or you know explaining to a tinder date how to like set up signal um imagine trying to get puss and be like all right so like you know i'm talking to you on tinder but like you need to get signal if you want to make this serious it's like if you're trying to fuck me, how about you message me on WhatsApp at least? I don't want the government looking in on my dick game. So there's all these surveillance issues that we've covered.

And there's also some just straight up information security issues that they've had where they have this antivirus, this framework agreement with other countries. They have to comply with antivirus standards and security standards in order to have users outside of mainland China, like Hong Kong, the US, or Canada. It's been found that people investigating their security will be like, hey, you have this, this, and this defect. But

that's noisy. Should we wait it out? I think it's a car passing by. Or should I close my window? No, no, no. Let it play. It's a car passing by. Or should I close my window? No, no, no. Let it play. It's a car. I hope. I think Spanish music.

Car. You know, one of the things at the protest was this mobile ministry van that was just covered in speakers. And one of the most surreal things

is that like right after I walked by that cop car that was just covered in speakers. And one of the most surreal things is that right after I walked by that cop car that was burning, there's another standoff with the police. And on one side of the street were a bunch of kids blasting fuck the police by it. And just like dancing to it just to taunt the cops. And on the other side was this guy just doing ministry, standing on a cart covered in speakers,

telling everyone about God. Fucking end of days, man. Weirdest night of my life. Okay. So security professors will contact Tencent and say, hey, you've got this, this, and this security issue that you might want to look into, these vulnerabilities. And they say, okay, we'll do that.

And then they release a new version. And then people have found, though, that they're like, they haven't actually dealt with them. They just covered it up to game the antivirus software into thinking that it's secure. Oh, wow. So they're just software into thinking that it's secure. Oh, wow. So they're just gaming it so that it passes these international compliance tests,

which almost seems like if you're going to go to that trouble, maybe you should just actually patch it. Yeah, it seems like it's more effort to hide it. Maybe it's still easier or something. I don't know. So it's found easier or something. I don't know. So it just has, it's found to like have all these vulnerabilities as far as like other more stringent requirements are concerned and they just never deal with it.

So a recent controversy in 2017 that was uncovered by the New York Times is they found that the Tencent senior officers were doing this like sexist degrading game where they would have women try to unscrew the bottle the bottle cap to a bottle while it was like between men's legs. Oh. So like simulate like giving men's legs. Oh. To like simulate like giving head or something. Sure, sure. Oh, like Rocky Horror Picture Show night. Really? Yeah, they do games at the beginning of that. I was kind of sexually assaulted by a woman

at a Rocky Horror Picture Show night and now I hate them. But this wasn't like... So this was on a stage in front of people oh yeah so was my experience really yeah don't go to rock the chinese aren't as clever as you think andy's letting you know rocky horror picture has been doing this for a long time yeah so the new york times they it's a bunch of failed fucking improvisers trying to be funny by telling 20 year old jokes over and over again they're hacks steven they're fucking hacks um the company issued an apology ma hua tong uh you know did serve kind of like a flipping apology in a few like it was brought up in like one

interview out of a hundred he did he was like right um i'll just direct you back to the company statement we're really sorry basically i'm like that was it that sounds about right from yeah like when you're in a company that big you just kind of issue a boilerplate apology and then you're like well the news articles have already been written so the damage is already done and people are going to forget about it as long as i just give the standard apology. Yeah. So to this day, Ma Huateng's wealth, it mainly comes from his 9.7% stake that he still has in Tencent Holdings. He also owns some property in Hong Kong and an art collection there worth about $150 million. He owns a redeveloped,

quote, palatial residence of 19,600 square feet in Hong Kong that includes a golf course. It includes the golf course? I don't know if the 19,000 does, but there is a golf course adjacent to it. Man, golf is fucking poison. Oh, it's also worth noting in 2016,

Ma transferred $2 billion worth of Tencent stock shares to a charitable foundation he and his family set up. Forbes was in the middle of reevaluating his net worth because he was closing in on to be china's richest man ahead of jack jack ma um but they they actually didn't they were about to deduct the two billion because he donated but they actually found that those stock shares they never actually transferred over they're're still in his name. Oh. He just said he did. And he actually still owns them. So it's part of his net worth. Yo, that is the most baller quarter with a string trick I've ever heard of.

Yeah, yeah, yeah. I'm going to give them a whole bunch of stocks. Actually, I never really let go of the string. So it's still in my pocket. As we know, charity is already a scam. of stocks actually i never really let go of the string so it's still in my pocket so like charitable as we know charity is already a scam but he's like i i don't even want to give him that so i some i i want to beat jack mott to be chinese china's richest man so uh today probably should have mentioned this up front but it's his his net worth fluctuates

quite a bit but today he is worth as of may 47.2 billion dollars he is he retains the position that he gained two years prior as china's richest man and it comes almost completely from tencent, which is involved in all of this censorship technology, social credit score, behavior modification. Yeah, I mean, people on the left will often, and it comes from a good place, they'll often kind of shout back when people criticize factors of the Chinese government, like Chinese surveillance, and because, you know, a lot of anti-Chinese propaganda is kind of a product of the State

Department or people unwittingly working on behalf of the State Department. But at the same time, it's still a massive institution that's still taking part in extraction department propaganda which you know especially with the um china flu thing like clearly that's just western saber rattling but it's also you know worthwhile to keep an eye out for trends that are being used for oppression um because that they're eventually going to make it you know if some of them already have um others are probably on the way to um you know our world yeah yeah if i had to conceptualize this i would just say that like his uh his rise in net worth is inextricably linked to the chinese communist party and his franchise that he's been given from them to develop these technologies that ultimately make life harder for workers and i think socialists should be uniformly opposed to that because like that's

uh it's it's they're just they're communists only in name basically and um the tankies will hate me whatever but they already did because of the hong kong episode the funny thing about like yeah a bunch of people got pissed off about the hong kong episode and like looking at what's going on at hong kong now you know you can say that a lot of the protests have been co-opted by the american state department and in a way maybe there are elements of that where they're played up for american propaganda but like on the whole you just have to feel bad for the people of h Kong. Because they're just stuck between, you know, it's like Berlin in the 50s. You know, you're just at the center of these two world powers, both trying to jockey for influence.

And, you know, the people there have to suffer yeah i mean it's the deal the tldrs should be like fuck xi jinping and also trump end imperialism in both places the way i look at china us is like they're competing imperialisms like my theory of imperialism is there can be multiple competing ones and like that have their own spheres of influence and they occasionally butt up against each other or they can work in concert and like a lot of u.s trade policy for the last 30 years has been basically to have normal relations with china and basically have them be de facto allied with us in a sense as far as like we don't we don't um we have like an economic non-aggression pact i guess yeah because for you know so long uh offshoring to china uh was a very

very useful tool for completely undercutting the american labor movement and uh which you know worked with flying colors which is why you know for all of the people's saber rattling about uh manufacturing going to china they don't actually care it's it's been incredibly successful in crushing unions right yeah like in if independent labor unions organized within China that aren't sanctioned by the CCP, they're put down. They're broken up. People go to jail. that occurred in the early 2000s, or mid-2000s actually, where after WTO was signed, the U.S. believed that what would happen is that there'd be a natural import of democracy with such an agreement. But instead, what has now happened is that it became more of an export of the

dictatorship that China currently is in. And with the NBA, a large portion of their viewership in combination with the Yao Ming was from a Chinese audience. And so Tencent was actually the platform that they use to watch the NBA games. And when one of, I believe it was a member of the Houston Rockets coaching staff tweeted out support of a Hong Kong protest the Chinese government and Tencent were like fuck the NBA and so the NBA had to roll back like all of that you know like good faith inner country sports adoration dollars and be like hey we don't believe these protesters are right we're totally cool bro and so that rhetoric of if china if you use china as a customer you have to play by their rules yeah

and it's because of tencent and pony himself that this marriage of corporate docility with the Chinese government is now being imposed on the rest of the world. It's still not the worst thing that a billionaire has done to the NBA, which was, of course, Charles Schultz selling the Sonics to Oklahoma City. uh yeah i mean um we should also point out that like that's an example of where uh you know mahwatang and tencent aren't in lockstep with the ccp they have their own ambitions they're separate from there are like you know only ephemerally related to what the party wants but the party's in charge so like you know they have to there's like you know only ephemerally related to what the party wants but the party's in charge so like you know they have to there's like this balancing act between these huge tech

companies that china wants to develop and retaining party control over them at the same time and you have to watch that whenever you think about like international developments in between China and the US so like got other companies call like calling the shots on more so on exporting technology and services like Huawei Huawei is in like a whole international spat partly because it like it didn't always tow the party line. They could have the party could have come to their rescue but they didn't always. Now they're in a whole spat with the US

and Canada. Similarly with Tencent. Having a contract to show the NBA in China would be incredibly lucrative. Even for just one team. Well, I mean, you know, from this video, I believe it was produced by Vox.

They mentioned that like, you know, although in the U.S. the NBA might have a slight edge over the NFL and other sports in terms of social media in china when it comes to sports the nba far outranks the other sports in terms of popularity on social media and i mean like you know it is it is interesting because like there is like i don't know if you guys seen that like you know marvel movies will have to like edit out white and black people kissing for chinese markets and stuff and like you know i don't know how to really frame this but the more racist a country is the more people love basketball like i know it seems fucking wild but like think about how racist this country has been but was in the 90s and how fucking huge jordan and the bulls were and think about you know basketball in the u.s now it's it's very popular but it's not nearly as big as it was and i'd like

to believe some racial uh relations are moderately better than they were pre-rodney king but china just as racist as they were and they're like man we fucking love some basketball i'm not saying racism and basketball go hand in hand but i'm saying that they but they both dribble well i i i think we should also know yogi that this is interesting because you're probably the biggest fan of basketball on the show uh i don't know steven i feel like you might like basketball more than me am i wrong you're wrong all right all right well then then yeah as a man that only enjoys uh the dallas mavericks because of dirk nowitzki and the fact that the sonics are no longer in siena uh yes i am the biggest basketball

fan all right uh that's all i got cool let's round this bitch out all right i'll just do that and with that this is brin grobstekers i'm yogi pollywall i'm andy palmer i'm steve jeffries uh thanks for listening everyone stay strong stay safe out there