Rachel Lu

Victory in WeChat War: How Tea Leaf Readers Got It Right

WeChat and Weibo have demonstrated their value as public utilities during the aftermath of the Sichuan earthquake. (Via Bigstockphoto)

A resounding victory has been scored against China’s all-powerful state-owned telecom operators — a victory for innovative, life-changing technology, for private enterprises and entrepreneurs, and for millions of users who came together on China’s social media to make their voices heard.

On April 23, about a month after the head of China’s Ministry of Industry and Information Technology (MIIT) told the press that the ministry was studying plans that would require Tencent, the developer of WeChat, a mobile messaging app with more than 300 million users, to charge a fee to its users, the MIIT announced that the government would leave the decision up to Tencent. That means WeChat users should rejoice, as Tencent has repeatedly stated that it does not plan to charge a fee.

When MIIT toyed with the idea of forcing Tencent to charge a fee, most observers believed that the ministry was persuaded by powerful vested interets at China’s state-owned telecom operators, whose core business of voice and SMS services are threatened by WeChat’s innovative and versatile platform.

What’s behind the reversal? Tea Leaf Nation predicted in a March 31 article that:

1. Chinese authorities and the telecom operators would not follow through with their threat to force Tencent to charge a fee, because it would have represented a sharp departure from its decade-old laissez faire approach to private Internet company management, harking back to the planned economy days. What’s more, the move would be probably have driven users to other mobile communication apps, such as LINE, and not voice or SMS channels upon which the telecom operators still rely.

2. The authorities used the statements as trial balloons, gauging reaction on Sina Weibo and other social media platforms in order to determine the extent of possible blowback. When China’s Internet users united in one voice to speak out against such a harebrained scheme, the authorities and telecom operators backed down.

One thing Tea Leaf Nation could not have predicted, however, was the devastating earthquake that hit Sichuan on April 20. Within minutes of the earthquake, China’s social media sprung into action. Many families immediately sent WeChat messages to their loved ones in the region. Indeed, the authorities encouraged people to use Weibo, WeChat and other data and micro-blogging services to find their family and friends, because the cellular network was overloaded in the crisis, and these services used up less telecom network resources than traditional voice communication.

@国产真货 tweeted on Sina Weibo, “Please don’t [make WeChat] charge a fee. When there is an earthquake, the services that did charge a fee [traditional voice and SMS communications] were completely paralyzed.” @鹿男芥末射手座 agreed about the crucial role social media played in the rescue efforts: ”The affected areas relied on WeChat and Weibo to communicate with the outside world in this earthquake. If they only had the voice services that the telecom operators charge money for, then the victim numbers could double!”

WeChat and Weibo have demonstrated their value as public utilities in the earthquake aftermath, and as a result, the government and telecom operators would have an even tougher time explaining a fee to the public.

The news brought quite a bit of schadenfreude as users gleefully commented on MIIT and the telecom operators’ defeat. The battle has been won, for now, but it remains to be seen whether Chinese Internet users’ other complaints against state-owned enterprises (the gasoline duopoly PetroChina and Sinopec, for example) can sway policymaking in those areas as well.

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Rachel Lu

Rachel Lu is a co-founder of Tea Leaf Nation. Rachel traces her ancestry to Southern China. She spent much of her childhood memorizing Chinese poetry. After long stints in New York, New Haven and Cambridge, she has returned to China to bear witness to its great transformation. She is currently based in China.
  • Paul Schoe

    Hi Rachel, Thanks for keeping us up-to-date with the developments on this.

    As far as the earthquake remarks are concerned, I loved the one from 国产真货: “Please don’t make WeChat charge a fee. When there is an earthquake, the services that did charge a fee (phone lines) were completely paralyzed.