A fascinating study of the tech giant and its symbiotic relationship with the Chinese government

F ive years ago, the Chinese tech company Tencent overtook Facebook to become the fifth largest company in the world. Though it’s still an unfamiliar name to many in the west, Tencent is a major stakeholder in tech companies and products including Spotify, Tesla, Snapchat, Monzo and Reddit, as well as the makers of video games such as Fortnite, League of Legends, Clash of Clans, and Call of Duty. The company’s interests reach, tendril-like, into the worlds of finance, cloud computing, media, messaging, video streaming and film production. And, in China, the business runs the Swiss Army knife super app WeChat – part social media platform, part digital wallet – currently used by 1.3 billion people.

That Tencent has achieved international capitalist supremacy from a communist base is astonishing, although readers of Lulu Chen’s book may be unsurprised to learn that, according to her, it has done so by maintaining close ties to the Chinese government, which values the access to the torrents of information Tencent collects daily. With few data protection laws in place, apps owned by Tencent have reportedly been used by the government to monitor, even imprison users. With Influence Empire, Chen, a reporter for Bloomberg, seeks to tell the story of arguably China’s greatest entrepreneurial success, expose the threads that link Xi Jinping’s regime to your Snapchat account, and familiarise us with the company’s reclusive, 50-year-old founder Ma Huateng, who goes by the incongruous English moniker “Pony”.

Pony is Chen’s white whale. Tracking him, she writes, “became something of a sport”. She has managed to interview the shy programmer only once, in 2015, in that most unfruitful of journalistic contexts, the group interview. As a result, we learn about him mostly through the testimony of colleagues and assorted hangers on. Pony’s story turns out to have much in common with the architects of other digital giants on the landscape. He was a “quiet, well-behaved and largely unnoticed” boy at school, obsessed with astronomy, drawn inexorably to computer science. He sold his first app, at 22, to the company where he was an intern. Despite interminable raises and promotions he felt dissatisfied working for others. In his spare time, he set up a chat forum called Ponysoft.net where he adopted an ebullient, opinionated persona. The internet allowed him to become the person he wanted to be.

In 1998 Pony and four friends founded Tencent, with a vague plan to bring the nascent internet to pager devices. The young men set up in a small office in the tech quarter of Shenzhen, Huaqiangbei, in a room dappled with light from a disco ball. Their initial offering, a high-end pager, flopped. At Pony’s urging the team developed chat software tailored for use in Chinese internet cafes. So few users showed up in the early days that Pony himself would loiter online, pretending to be a girl, chatting to anyone who stumbled in (he would meet his wife, a music teacher, on a later iteration of the platform). With regular updates, however, the service soon grew, attracting millions of dollars of investment.

Tencent’s success is a result of the company’s ability to adapt to the shifting internet, and Chen ably charts its diversification over the years. But it is also clear that Pony, a private businessman, has survived and thrived in a state-dominant economy through tact, diplomacy and a canny political sense (he is a member of China’s legislative council, which meets once a year in Beijing to discuss the national agenda). The book’s most interesting material explores the waxing and waning of the relationship between Tencent and the Chinese communist party, which is eager to, as Chen puts it, “keep the rising class of tech-savvy moguls in place before their economic aspirations turn political”. (She claims, for example, that the Chinese government has disrupted Tencent’s services for overseas customers, delaying messages and transactions, when it wanted to show who’s boss.)

Tensions exist at an international level, too, created by Beijing’s refusal to allow US auditors to inspect Chinese companies. Tencent has become embroiled, to a certain degree, in a proxy war between governments. Before he left office, for example, Donald Trump attempted to prevent American companies from dealing with WeChat. There will be further critical junctures and decisive battles for Tencent; this is the first instalment in an ongoing saga. Likewise, the fundamental question of how we should regulate the tech behemoths whose products mould our inner and outer lives is yet to be settled, or even properly understood. When those behemoths are themselves shaped by authoritarian regimes, it is a question of even greater urgency.

Influence Empire: The Story of Tencent & China’s Tech Ambition by Lulu Chen is published by Hodder & Stoughton (£25). To support the Guardian and Observer order your copy at guardianbookshop.com. Delivery charges may apply.