This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

China's Tech Giants Quietly Grow off Beijing's Internet Controls

TAIPEI ( TheStreet) -- China's increasingly foolproof campaign to block sensitive Internet content stifles business growth, the usual argument goes.

But who's stifled depends on whose business it is. Some people are growing because of China's Great Firewall.

The firewall has been fortified largely in secret. China's 30,000 Internet police won't come out and say they block news from abroad or shut down Web sites that challenge Communist Party lines.

So it takes some imagination to figure out who might be making money off it.

Basically, think about who might replace banned Web sites that once satisfied restless Chinese teenagers in cybercafes, graduate student researchers or office workers in foreign firms who want to join social networking sites.

First, back to the stifling of business growth: Barriers against foreign social networking sites, such as Facebook (FB) and Twitter, can make it hard for Chinese entrepreneurs or their staffs to do dialogue with would-be partners overseas. There's nothing like a good old Google (GOOG) Internet search, either. But Google servers are based just offshore in Hong Kong, slowing access onshore, and monitoring of user activity by Beijing may further gum up connections.

China's growing list of government agencies that regulate the Internet knew about these risks to business development, however, so they have increased Internet speeds and fostered growth in local alternatives to the blocked foreign sites.

Market research and academic surveys find that most Chinese Net users don't need to look at blocked Web sites anymore and that even many of those who can don't. Just a sliver of the population with the English language skills and computer expertise to jump the Firewall actually cross it. Most are used to getting news or doing research via local Web sites. They e-mail friends abroad instead of socially networking.

That's where the business growth comes in. Chinese blog services, search engines, social networking sites and cloud storage are taking over where the banned foreign sites are kept out of the game.

China's homegrown Sina Weibo (SINA - Get Report) , Tencent Weibo and Renren (RENN - Get Report) have replaced banned Web sites that would allow personal spaces or blogs. On the no-go list are Facebook and Twitter and likewise YouTube. ("Weibo," incidentally, is Mandarin Chinese for "microblog.")

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
BIDU $207.33 0.00%
RENN $2.45 0.00%
SINA $32.45 0.00%
AAPL $123.25 0.00%
FB $83.30 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs