1 00:00:00,120 --> 00:00:03,880 Speaker 1: In China. Everything happens through each at uber or venmo, 2 00:00:04,360 --> 00:00:17,239 Speaker 1: or Yelp or Tinder, really everything. Hello and welcome back 3 00:00:17,280 --> 00:00:23,160 Speaker 1: to the Bloomberg Benchmark Podcast. It's Thursday September. I'm Scott 4 00:00:23,239 --> 00:00:26,799 Speaker 1: Lanman and economics editor at Bloomberg News in Washington, and 5 00:00:26,840 --> 00:00:29,920 Speaker 1: I'm Kate Smith, editor here in New York. So, okay, 6 00:00:30,240 --> 00:00:33,479 Speaker 1: which apps do you use on your smartphone? Most frequently? 7 00:00:33,800 --> 00:00:37,239 Speaker 1: The Bloomberg Anywhere app? Unfortunately I'm a little addicted to. 8 00:00:37,680 --> 00:00:41,120 Speaker 1: But I know our guest is giving us the loser 9 00:00:41,240 --> 00:00:46,919 Speaker 1: symbol for let's see, mostly Snapchat, Instagram. I'm a I'm 10 00:00:46,960 --> 00:00:52,120 Speaker 1: a millennial, so shamefully, what about you? You Facebook lighter Venmo? 11 00:00:52,880 --> 00:00:54,760 Speaker 1: I just got rid of Facebook. I'm really proud of 12 00:00:54,800 --> 00:00:57,800 Speaker 1: myself for that text messaging. I do text message. Yes, 13 00:00:57,920 --> 00:01:00,720 Speaker 1: what about you, Scott? I would say definitely the Bloomberg 14 00:01:00,760 --> 00:01:04,679 Speaker 1: That's my primary app, but yet but also Facebook, Twitter 15 00:01:04,920 --> 00:01:09,039 Speaker 1: been using Venmo to pay our babysitter recently. Text messaging. 16 00:01:09,600 --> 00:01:12,520 Speaker 1: But you know, I lived in China for a few years, 17 00:01:12,640 --> 00:01:15,560 Speaker 1: and if you happen to be in China, you would 18 00:01:15,560 --> 00:01:19,240 Speaker 1: have just one app for many of those functions. In 19 00:01:19,440 --> 00:01:23,759 Speaker 1: Chinese it's called wasein, which roughly translates as micro message, 20 00:01:23,800 --> 00:01:27,520 Speaker 1: and it's known as we chat in English. Now, when 21 00:01:27,520 --> 00:01:30,080 Speaker 1: I was there, I was just using it for occasionally 22 00:01:30,120 --> 00:01:33,560 Speaker 1: messaging with friends, but I was really just barely scratching 23 00:01:33,600 --> 00:01:36,800 Speaker 1: the surface. And over the past few years, use of 24 00:01:36,840 --> 00:01:40,440 Speaker 1: we chat has exploded and seems to permeate every part 25 00:01:40,520 --> 00:01:43,640 Speaker 1: of people's lives, and I think it probably accounts for 26 00:01:44,080 --> 00:01:47,840 Speaker 1: a good chunk of China's GDP. We're an economic podcast, 27 00:01:47,880 --> 00:01:50,240 Speaker 1: and that's what we like to talk about here. So 28 00:01:50,440 --> 00:01:52,760 Speaker 1: if it were to shut down for whatever reason, it 29 00:01:52,800 --> 00:01:56,280 Speaker 1: could take a slice of the world's second largest economy 30 00:01:56,320 --> 00:01:59,040 Speaker 1: down with it. And we're talking about seven hundred and 31 00:01:59,080 --> 00:02:02,559 Speaker 1: sixty million users, and that's more than double the entire 32 00:02:02,600 --> 00:02:06,360 Speaker 1: population of the United States, right, yeah, yeah, yeah, well more. 33 00:02:06,880 --> 00:02:10,919 Speaker 1: That's incredible. And the company behind we chat, ten Cent. 34 00:02:11,000 --> 00:02:14,040 Speaker 1: They're worth more than two hundred and fifty billion dollars, 35 00:02:14,080 --> 00:02:16,440 Speaker 1: which that makes it one of the most i mean, 36 00:02:16,520 --> 00:02:19,440 Speaker 1: i'm sorry, the most valuable company outside of the United 37 00:02:19,480 --> 00:02:23,840 Speaker 1: States and ranks it tenth worldwide overall. Yeah, I mean, 38 00:02:23,880 --> 00:02:27,520 Speaker 1: it's just unbelievable to think about that. But joining us 39 00:02:27,560 --> 00:02:30,840 Speaker 1: to help explain all this is our colleague June Lawrence, 40 00:02:30,880 --> 00:02:33,320 Speaker 1: who's going to tell us about what it was like 41 00:02:33,440 --> 00:02:36,640 Speaker 1: to use we Chat in China. Done as a writer 42 00:02:36,720 --> 00:02:39,520 Speaker 1: for Bloomberg in New York. She speaks Mandarin and lived 43 00:02:39,520 --> 00:02:42,760 Speaker 1: in China for about five years, most recently in Beijing 44 00:02:42,840 --> 00:02:46,240 Speaker 1: as a correspondent for Bloomberg. Now, she's a good test 45 00:02:46,320 --> 00:02:49,160 Speaker 1: case for the magic of we chat in China because 46 00:02:49,160 --> 00:02:51,840 Speaker 1: she left Beijing in two thousand nine before we Chat 47 00:02:51,880 --> 00:02:57,040 Speaker 1: even existed, and recently went there and used it a lot. Hey, Dune, Hey, 48 00:02:57,040 --> 00:03:00,440 Speaker 1: thanks for being with us. Yeah, I'm love we chat. 49 00:03:01,040 --> 00:03:03,639 Speaker 1: So dude, can you tell us a little bit about 50 00:03:03,720 --> 00:03:06,720 Speaker 1: we Chat? How is it different than what Americans tend 51 00:03:06,720 --> 00:03:10,320 Speaker 1: to use their smartphones for. Well, again, I'm also a 52 00:03:10,360 --> 00:03:12,960 Speaker 1: good test case because until, like fairly recently, I had 53 00:03:12,960 --> 00:03:18,040 Speaker 1: a flip phone. I'm not joking, so I'm just so. 54 00:03:18,120 --> 00:03:20,440 Speaker 1: I'm also a test case for like just the magic 55 00:03:20,760 --> 00:03:25,800 Speaker 1: of mobile technology and generally, um, So, the main difference 56 00:03:25,840 --> 00:03:29,440 Speaker 1: is that in China everything happens through we Chat, really everything. 57 00:03:30,120 --> 00:03:32,960 Speaker 1: So all of those separate apps you have for Uber 58 00:03:33,400 --> 00:03:38,880 Speaker 1: or Venmo or Yelp or Tinder, none of which I have, 59 00:03:39,080 --> 00:03:41,560 Speaker 1: by the way, but I know they exist and I 60 00:03:41,600 --> 00:03:43,800 Speaker 1: know a lot of people use them. And in China, 61 00:03:44,000 --> 00:03:47,880 Speaker 1: all those things happen within the wee chat ecosystem. It 62 00:03:47,960 --> 00:03:50,160 Speaker 1: looks when you open it up, you know, like what's 63 00:03:50,200 --> 00:03:52,480 Speaker 1: app doesn't look that different from a basic messaging app. 64 00:03:53,000 --> 00:03:55,800 Speaker 1: But then when you go further into the app, you know, 65 00:03:55,960 --> 00:03:59,440 Speaker 1: you tap on your profile and then you tap on 66 00:03:59,440 --> 00:04:02,560 Speaker 1: your wallet. It there's just this huge list of services 67 00:04:02,560 --> 00:04:05,040 Speaker 1: that you can get to through we chat. So it 68 00:04:05,040 --> 00:04:09,920 Speaker 1: includes ride sharing and ride hailing apps, includes like a 69 00:04:10,040 --> 00:04:14,640 Speaker 1: Venmo style, you know, shared payment. It includes utilities you 70 00:04:14,680 --> 00:04:18,680 Speaker 1: can pay your electric bill, include city services. You could 71 00:04:18,720 --> 00:04:21,440 Speaker 1: go in and figure out the bus route you need 72 00:04:21,480 --> 00:04:23,520 Speaker 1: to take, you could go in and figure out where 73 00:04:23,520 --> 00:04:26,080 Speaker 1: to park your car, and then you can pay for 74 00:04:26,120 --> 00:04:28,440 Speaker 1: all this through e chat. And how has this all 75 00:04:28,520 --> 00:04:31,360 Speaker 1: changed life in China compared with when when you were 76 00:04:31,400 --> 00:04:34,599 Speaker 1: there and what you saw more recently. It's just made 77 00:04:34,760 --> 00:04:38,200 Speaker 1: everything so much easier. I mean, you talk about and 78 00:04:38,440 --> 00:04:41,600 Speaker 1: I'm saying this not in economic sense, but it's just efficient. 79 00:04:41,720 --> 00:04:46,200 Speaker 1: There's efficiencies and it makes everything so much easier from 80 00:04:46,200 --> 00:04:49,080 Speaker 1: a business perspective too, So that's got to have huge 81 00:04:49,360 --> 00:04:52,480 Speaker 1: economic knock on effects. But one thing that we can't 82 00:04:52,520 --> 00:04:54,880 Speaker 1: forget when we're talking about, you know, apps in China, 83 00:04:54,960 --> 00:04:57,080 Speaker 1: especially when it comes to social media, is that so 84 00:04:57,120 --> 00:04:59,640 Speaker 1: many of them are not usable in mainland China. So 85 00:04:59,680 --> 00:05:04,560 Speaker 1: I'm think king of Facebook and Twitter, right, those aren't Yeah, 86 00:05:04,680 --> 00:05:07,400 Speaker 1: so so much is that contribute to we chat success? 87 00:05:07,520 --> 00:05:10,160 Speaker 1: I think that contributes a great, a great, great deal 88 00:05:10,240 --> 00:05:13,120 Speaker 1: to it. I mean on the economy side, it's never 89 00:05:13,160 --> 00:05:16,240 Speaker 1: been an economy with very strong services in a lot 90 00:05:16,279 --> 00:05:22,720 Speaker 1: of ways, um, And it's also just on the internet side. Obviously, 91 00:05:23,040 --> 00:05:25,320 Speaker 1: there are a lot of restrictions on the internet. It's 92 00:05:25,320 --> 00:05:28,760 Speaker 1: a very specific space. A lot of foreign companies have 93 00:05:28,880 --> 00:05:32,640 Speaker 1: been barred from providing services on the Chinese Internet. So 94 00:05:32,839 --> 00:05:36,039 Speaker 1: that that has definitely contributed to we chat success and 95 00:05:37,080 --> 00:05:39,400 Speaker 1: means to a certain extent that you know, whether it 96 00:05:39,440 --> 00:05:42,839 Speaker 1: can move beyond China is an open question, and it 97 00:05:42,880 --> 00:05:45,520 Speaker 1: hasn't really been very successful in doing that. But also 98 00:05:45,760 --> 00:05:48,159 Speaker 1: China's a huge market. Do they need to move beyond China? 99 00:05:48,680 --> 00:05:50,560 Speaker 1: I mean I was reading something about we Chat a 100 00:05:50,600 --> 00:05:52,960 Speaker 1: couple of days ago talking about how little they've really 101 00:05:53,000 --> 00:05:56,000 Speaker 1: focused on attracting non Chinese customers, and like they were 102 00:05:56,000 --> 00:05:58,359 Speaker 1: talking about like the stickers that you can use and 103 00:05:58,400 --> 00:06:00,440 Speaker 1: they have tons and tons and tons as the circles 104 00:06:00,440 --> 00:06:02,719 Speaker 1: that you can use for Spring Festival, for example. But 105 00:06:02,839 --> 00:06:05,760 Speaker 1: I think like when you searched Ramadan, there was virtually nothing, 106 00:06:05,880 --> 00:06:08,040 Speaker 1: So I mean, why has the company not even I mean, 107 00:06:08,040 --> 00:06:10,279 Speaker 1: it sounds like they're not even interested in really bringing 108 00:06:10,279 --> 00:06:13,720 Speaker 1: this outside of or I mean, I guess anything besides 109 00:06:13,800 --> 00:06:16,919 Speaker 1: the shell of the messaging service outside of China. I mean, 110 00:06:16,920 --> 00:06:19,440 Speaker 1: it doesn't really sound like there's any incentive for them 111 00:06:19,480 --> 00:06:22,440 Speaker 1: to do so, I don't know, I can't really answer that, 112 00:06:22,480 --> 00:06:24,920 Speaker 1: but I think I think they have definitely made efforts, 113 00:06:25,080 --> 00:06:28,320 Speaker 1: but it's a it's basically a totally different business outside 114 00:06:28,360 --> 00:06:32,119 Speaker 1: of China, right, It's a totally different endeavor inside China. 115 00:06:32,200 --> 00:06:35,440 Speaker 1: And also just culturally now like we Chat has formed 116 00:06:35,440 --> 00:06:37,320 Speaker 1: the culture. People are so used to it, and they're 117 00:06:37,360 --> 00:06:39,640 Speaker 1: so used to going through we Chat for everything that 118 00:06:39,800 --> 00:06:42,080 Speaker 1: is just you know, they don't have to do that much. 119 00:06:42,120 --> 00:06:44,720 Speaker 1: They keep on offering. They have this incredible pace of 120 00:06:44,720 --> 00:06:49,719 Speaker 1: offering new services and new platforms. And I was thinking, Scott, 121 00:06:49,760 --> 00:06:52,919 Speaker 1: when you said, how we Chat if it just disappeared, 122 00:06:52,920 --> 00:06:54,760 Speaker 1: would take out like a large chunk of the g 123 00:06:54,880 --> 00:06:57,360 Speaker 1: d P. I was just thinking more, it would be 124 00:06:57,400 --> 00:07:00,400 Speaker 1: sort of mass insanity. People would just lose their minds. 125 00:07:00,520 --> 00:07:05,680 Speaker 1: It's so it's so much something you depend on. Is 126 00:07:05,680 --> 00:07:09,200 Speaker 1: it possible to live your life in China, you know, 127 00:07:09,320 --> 00:07:12,600 Speaker 1: no matter what age you are or what business or 128 00:07:12,640 --> 00:07:16,400 Speaker 1: who your employer is without having we Chat these days, 129 00:07:16,720 --> 00:07:20,160 Speaker 1: I'm sure it is. One guy I talked to who 130 00:07:20,640 --> 00:07:23,200 Speaker 1: works on a we Chat based company that does English tutoring, 131 00:07:23,760 --> 00:07:27,000 Speaker 1: made this funny comment that I that I loved, which 132 00:07:27,040 --> 00:07:29,560 Speaker 1: was that it's sort of this socially awkward thing to 133 00:07:29,640 --> 00:07:32,920 Speaker 1: not use we chat. So it's like he was grasping 134 00:07:32,960 --> 00:07:35,000 Speaker 1: for an analogy and he said, it's sort of like 135 00:07:35,120 --> 00:07:38,720 Speaker 1: refusing to wear shoes and going everywhere barefoot. So I'm 136 00:07:38,720 --> 00:07:40,840 Speaker 1: sure that there are people who do it, obviously, but 137 00:07:41,520 --> 00:07:44,240 Speaker 1: you know, if you're in the mainstream, you're using we chat. 138 00:07:44,520 --> 00:07:46,560 Speaker 1: So I have a question for you. I'm thinking about 139 00:07:46,560 --> 00:07:50,840 Speaker 1: like the evolution of like Facebook, at Twitter, Instagram, now snapchat. 140 00:07:51,840 --> 00:07:53,720 Speaker 1: Facebook when it first came out was like, you know, 141 00:07:53,720 --> 00:07:56,000 Speaker 1: the first adopters, and it was your younger people. It 142 00:07:56,080 --> 00:07:58,240 Speaker 1: was cool to use it, and now Facebook is really 143 00:07:58,280 --> 00:08:00,680 Speaker 1: just like you know, everyone's grandparents are on it, it's 144 00:08:00,680 --> 00:08:02,680 Speaker 1: your aunts and uncle and now people don't really use 145 00:08:02,720 --> 00:08:05,560 Speaker 1: it anymore. They moved over to Instagram, and now it's 146 00:08:05,560 --> 00:08:08,480 Speaker 1: like now everyone's aunt and grandmother is on Instagram, So 147 00:08:08,560 --> 00:08:11,040 Speaker 1: now they're moving over to Snapchat. Like, is there any 148 00:08:11,080 --> 00:08:14,520 Speaker 1: kind of like evolution of moving onto the latest greatest 149 00:08:14,520 --> 00:08:16,320 Speaker 1: thing in China? Or is it just kind of like 150 00:08:16,400 --> 00:08:19,440 Speaker 1: we chats it and that's it doesn't matter how new 151 00:08:19,440 --> 00:08:22,880 Speaker 1: and cool it is, people are always using it. Well, yeah, 152 00:08:22,920 --> 00:08:25,440 Speaker 1: I mean, I think there's a difference between something that 153 00:08:25,520 --> 00:08:27,720 Speaker 1: you like to use because it's cool and something that 154 00:08:27,800 --> 00:08:31,640 Speaker 1: has a fundament mental impact on the ease with which 155 00:08:31,680 --> 00:08:35,280 Speaker 1: you live your life. And that is the difference between 156 00:08:35,320 --> 00:08:39,000 Speaker 1: we Chat in China and Facebook outside of China, and 157 00:08:39,040 --> 00:08:41,000 Speaker 1: I think it's something that Facebook is trying to address. 158 00:08:41,760 --> 00:08:45,120 Speaker 1: But that is something that makes me chat extremely valuable, 159 00:08:45,520 --> 00:08:49,520 Speaker 1: you know, and extremely powerful because it's not a coolness factor. 160 00:08:50,000 --> 00:08:52,840 Speaker 1: There are cool elements to it, and they are introducing 161 00:08:53,200 --> 00:08:58,000 Speaker 1: new elements all the time, but the basic utility is 162 00:08:58,040 --> 00:09:00,600 Speaker 1: more sort of fundamental to your life than it is 163 00:09:00,679 --> 00:09:04,040 Speaker 1: for us using an app here, right, all right, for 164 00:09:04,120 --> 00:09:07,079 Speaker 1: some more perspective, let's bring in gond Lee, who's joining 165 00:09:07,160 --> 00:09:10,520 Speaker 1: us on his cell phone from China. He's an economics 166 00:09:10,520 --> 00:09:14,080 Speaker 1: professor at Texas A and M University, but he also 167 00:09:14,120 --> 00:09:17,480 Speaker 1: has another major role as director of the China Household 168 00:09:17,520 --> 00:09:22,400 Speaker 1: Finance Survey at the Southwestern University of Finance and Economics 169 00:09:22,440 --> 00:09:28,120 Speaker 1: in the city of chang Do. Professor Scott, thanks for 170 00:09:28,200 --> 00:09:31,120 Speaker 1: hiving me here now. Professor, you spend a lot of 171 00:09:31,160 --> 00:09:34,400 Speaker 1: time in both the US and China. What are the 172 00:09:34,440 --> 00:09:37,200 Speaker 1: main differences you see and how people use their phones 173 00:09:37,280 --> 00:09:39,960 Speaker 1: in the two countries and how people use we chat 174 00:09:39,960 --> 00:09:43,960 Speaker 1: in China. So lots of people using cell phones, lots 175 00:09:43,960 --> 00:09:46,440 Speaker 1: of people on the smartphones, and all the time. This 176 00:09:46,600 --> 00:09:50,360 Speaker 1: is posed to in the United States and in China. 177 00:09:50,600 --> 00:09:54,360 Speaker 1: So the major difference from years ago is you see 178 00:09:54,360 --> 00:09:56,480 Speaker 1: everywhere people just look at the phones. In still of 179 00:09:56,559 --> 00:10:00,079 Speaker 1: interact with were saying, nine, you don't interact with you 180 00:10:00,400 --> 00:10:02,920 Speaker 1: with a person around you, You just look at your 181 00:10:02,960 --> 00:10:06,320 Speaker 1: cell phones. I think for smartphones makes people one way 182 00:10:06,360 --> 00:10:08,480 Speaker 1: to makes people close to each other from far away. 183 00:10:08,559 --> 00:10:12,960 Speaker 1: Another way I think actually makes people even for people 184 00:10:13,000 --> 00:10:16,720 Speaker 1: close to you far away. So I don't see difference 185 00:10:16,760 --> 00:10:19,400 Speaker 1: in that in that one. But in terms of which had, yes, 186 00:10:19,559 --> 00:10:23,080 Speaker 1: I agree with everything just said. The witch had which 187 00:10:23,120 --> 00:10:26,880 Speaker 1: has become a major part of the people's daily life. 188 00:10:27,200 --> 00:10:30,280 Speaker 1: And there's no estimate, but I would guess personally, I 189 00:10:30,280 --> 00:10:33,920 Speaker 1: would guess that people spend let's say hours a day 190 00:10:34,080 --> 00:10:36,760 Speaker 1: on witch Head. At least how many hours a day 191 00:10:36,760 --> 00:10:41,000 Speaker 1: do you spend on wit Chat? I spend maybe two hours, 192 00:10:41,280 --> 00:10:44,400 Speaker 1: one hour, two hours on days the things I use, 193 00:10:44,520 --> 00:10:47,559 Speaker 1: which had to travel a lot, even within China, so 194 00:10:47,600 --> 00:10:51,520 Speaker 1: I use which had as a major work too. I 195 00:10:51,640 --> 00:10:56,840 Speaker 1: talked to my people using witchad. I basically bring people together, 196 00:10:56,920 --> 00:11:00,120 Speaker 1: have conferences on witch Head. So it's been not me 197 00:11:00,280 --> 00:11:04,000 Speaker 1: just for entertainment. Mostly is not for intedtaim Mostly is 198 00:11:04,000 --> 00:11:07,719 Speaker 1: actually is a tool people use for the productivity for 199 00:11:07,840 --> 00:11:11,079 Speaker 1: two to work together. It sounds like it really permeates 200 00:11:11,120 --> 00:11:14,760 Speaker 1: people's lives there. But let's talk about some broader perspective. 201 00:11:15,280 --> 00:11:18,440 Speaker 1: If you remember ten Cent, the company behind wa Chat, 202 00:11:19,080 --> 00:11:23,480 Speaker 1: they're actually China's most valuable company based on market capitalization, 203 00:11:23,960 --> 00:11:26,480 Speaker 1: and by that measure, it's bigger than you know some 204 00:11:26,600 --> 00:11:31,679 Speaker 1: major US companies like JP, Morgan, Wells Fargo, even Walmart. 205 00:11:32,000 --> 00:11:36,160 Speaker 1: Does it contribute to China's GDP the way those companies 206 00:11:36,200 --> 00:11:41,280 Speaker 1: contribute to the US economy. So Penson major profits are 207 00:11:41,360 --> 00:11:46,559 Speaker 1: coming from online games. The wait chad produced very little 208 00:11:46,760 --> 00:11:50,760 Speaker 1: revenues for Tencent. I think Penson has not yet figured 209 00:11:50,800 --> 00:11:54,040 Speaker 1: out how to make money, or basically they're not interested 210 00:11:54,080 --> 00:11:57,200 Speaker 1: in making money via their you know, the dominance on 211 00:11:57,240 --> 00:12:00,520 Speaker 1: the communication tools over the wait chat. About we chat 212 00:12:00,559 --> 00:12:03,240 Speaker 1: has a major tool. As I mentioned that it has 213 00:12:03,280 --> 00:12:07,440 Speaker 1: contributed to the Chinese GDP, it's very difficult to calculate. 214 00:12:07,679 --> 00:12:10,920 Speaker 1: I was thinking about how to calculate that which had 215 00:12:11,000 --> 00:12:16,640 Speaker 1: contribution to the GDP. It's it's difficult, right, And I'm sure, 216 00:12:16,679 --> 00:12:20,040 Speaker 1: I'm sure it's difficult to calculate how Facebook or Twitter 217 00:12:20,320 --> 00:12:23,679 Speaker 1: contribute to us GDP. One thing that I focused on 218 00:12:23,720 --> 00:12:26,680 Speaker 1: a lot when I was visiting in April was just 219 00:12:26,760 --> 00:12:29,080 Speaker 1: I thought how interesting it is that it makes that 220 00:12:29,120 --> 00:12:32,600 Speaker 1: we Chat makes it so easy for startups to kind 221 00:12:32,640 --> 00:12:36,240 Speaker 1: of throw themselves out there and to raise money, to 222 00:12:36,320 --> 00:12:39,599 Speaker 1: get followers and you know, create these sort of mini businesses. 223 00:12:40,200 --> 00:12:45,000 Speaker 1: So anecdotally, even though Tencent hasn't really figured out how 224 00:12:45,000 --> 00:12:50,000 Speaker 1: to monetize we chat for their own purposes, I mean, anecdotally, 225 00:12:50,040 --> 00:12:55,040 Speaker 1: I think it seems to be promoting consumer spending, promoting 226 00:12:55,120 --> 00:12:59,520 Speaker 1: job creation and entrepreneurial endeavors. Things like that. So again, 227 00:12:59,520 --> 00:13:01,840 Speaker 1: I mean I read that it would it's hard to measure, 228 00:13:01,920 --> 00:13:05,000 Speaker 1: but just if you talk to people, the ease is 229 00:13:05,040 --> 00:13:07,480 Speaker 1: not just in daily things like buying your food or 230 00:13:07,600 --> 00:13:10,320 Speaker 1: hailing your taxi. The ease in is in sort of 231 00:13:10,320 --> 00:13:15,679 Speaker 1: more sharply economic things like raising money or starting your 232 00:13:15,679 --> 00:13:18,520 Speaker 1: own business. Well do you get that sense, professors that 233 00:13:18,559 --> 00:13:21,839 Speaker 1: it has kind of helped in some intangible or entrepreneurial 234 00:13:21,840 --> 00:13:25,760 Speaker 1: ways that aren't measured in the GDP statistics. There are 235 00:13:25,800 --> 00:13:29,640 Speaker 1: other similar products, one of them which I've been used 236 00:13:29,960 --> 00:13:33,079 Speaker 1: before I thought served as a similar tool like I 237 00:13:33,080 --> 00:13:35,880 Speaker 1: don't even heard of. That called Dindin is actually made 238 00:13:35,880 --> 00:13:38,920 Speaker 1: by ali Baba once upon a time. There are a 239 00:13:38,960 --> 00:13:43,400 Speaker 1: few pire of time ali Baba requires their communication official 240 00:13:43,440 --> 00:13:46,640 Speaker 1: complications via Dindin instead of which had. So that's what 241 00:13:46,800 --> 00:13:49,600 Speaker 1: that's how I have to use it, install the Dindin 242 00:13:50,679 --> 00:13:53,800 Speaker 1: in my cell phone. My point is, yes, which had 243 00:13:53,880 --> 00:13:59,840 Speaker 1: indeed helps a lot, and all these entrepreneur activities or 244 00:14:00,080 --> 00:14:03,240 Speaker 1: other activities a lot. But if there were no witch Head, 245 00:14:03,440 --> 00:14:06,959 Speaker 1: I'm sure there other softwarees would fill in the gap. 246 00:14:07,679 --> 00:14:12,040 Speaker 1: My point here is it's a technology innovation. It's a 247 00:14:12,720 --> 00:14:16,480 Speaker 1: it's a smartphone era of the smartphone have made all 248 00:14:16,559 --> 00:14:22,160 Speaker 1: these activities become much easier, makes our lives, it makes 249 00:14:22,160 --> 00:14:27,800 Speaker 1: work become much easier. So it's not necessary the uh, 250 00:14:27,920 --> 00:14:31,440 Speaker 1: it's necessary the witch head itself, I would say, it's 251 00:14:31,440 --> 00:14:33,880 Speaker 1: a smartphone itself, I think, which has done a wonderful 252 00:14:33,960 --> 00:14:40,920 Speaker 1: job facility the process of people using smartphones, and so 253 00:14:41,120 --> 00:14:45,120 Speaker 1: that's of course it's I'm sure it is that case. Yeah, 254 00:14:45,160 --> 00:14:48,720 Speaker 1: But let's let's say, for example, ten Cent ran into 255 00:14:48,760 --> 00:14:51,640 Speaker 1: some trouble with the government and they decided to suspend 256 00:14:52,160 --> 00:14:55,360 Speaker 1: the app for some reason. Would that be disruptive to 257 00:14:56,040 --> 00:14:59,040 Speaker 1: hundreds of millions of people until they figure out how 258 00:14:59,080 --> 00:15:03,040 Speaker 1: to communicator you business? Otherwise I would say that hospital 259 00:15:03,160 --> 00:15:06,920 Speaker 1: is very slim. I know the Tencent team reasonably well. 260 00:15:07,240 --> 00:15:11,120 Speaker 1: I was very very careful in terms of not doing 261 00:15:11,200 --> 00:15:14,120 Speaker 1: anything offending the government. But yes, and I think that 262 00:15:14,360 --> 00:15:20,480 Speaker 1: that interruption, of which if you're happened, it will disrupted 263 00:15:21,600 --> 00:15:23,800 Speaker 1: a lot of the country, but for a short period 264 00:15:23,800 --> 00:15:27,800 Speaker 1: of time because other software we're filling in the gap quickly. 265 00:15:28,160 --> 00:15:29,840 Speaker 1: I wanted to talk a little bit about kind of 266 00:15:29,840 --> 00:15:32,560 Speaker 1: the downside of having one company, because you were saying, 267 00:15:32,560 --> 00:15:34,920 Speaker 1: you know, other other companies could fill that vacuum, but 268 00:15:35,000 --> 00:15:37,040 Speaker 1: as it stands up, it sounds like there's kind of 269 00:15:37,080 --> 00:15:39,240 Speaker 1: one that dominates, and I wanted to talk to you 270 00:15:39,240 --> 00:15:41,520 Speaker 1: about the downside of that. So here in the US, 271 00:15:41,560 --> 00:15:43,240 Speaker 1: I know that a lot of people get very concerned 272 00:15:43,240 --> 00:15:47,080 Speaker 1: about companies like Google and Facebook and kind of the 273 00:15:47,160 --> 00:15:50,040 Speaker 1: ubiquitous use of those and all of the information that 274 00:15:50,080 --> 00:15:52,200 Speaker 1: they track on those users, you know, to the point 275 00:15:52,280 --> 00:15:56,480 Speaker 1: where you know you see very very specialized advertisements when 276 00:15:56,560 --> 00:16:00,120 Speaker 1: you're using those platforms. Is there any concern with in 277 00:16:00,280 --> 00:16:03,600 Speaker 1: China about that happening on we Chat because it's it's 278 00:16:03,600 --> 00:16:06,560 Speaker 1: so much more information and it's so much more centralized. 279 00:16:07,760 --> 00:16:11,560 Speaker 1: So at this stage, I don't think there's any concerns. 280 00:16:12,080 --> 00:16:18,240 Speaker 1: Which had has been rather careful not offending people's privacy, 281 00:16:18,640 --> 00:16:23,040 Speaker 1: not pushing up too many advertisement pencon knows and everybody 282 00:16:23,080 --> 00:16:26,200 Speaker 1: knows that which can make a lot of money, they 283 00:16:26,200 --> 00:16:27,920 Speaker 1: can use which had to make a lot of money 284 00:16:27,960 --> 00:16:32,240 Speaker 1: for sure because of the ecosystem, because of the so 285 00:16:32,320 --> 00:16:34,520 Speaker 1: many people are using it and so many people depend 286 00:16:34,600 --> 00:16:38,080 Speaker 1: on it. But Pence has not found that, not found 287 00:16:38,080 --> 00:16:42,320 Speaker 1: it because they're very very careful about to raise people's 288 00:16:42,320 --> 00:16:47,000 Speaker 1: concern about their dominances online and use that dominant dominance 289 00:16:47,040 --> 00:16:50,080 Speaker 1: to online to to make money or to do anything else. 290 00:16:51,040 --> 00:16:54,440 Speaker 1: So not yet in you're traveling between the US and China, 291 00:16:54,520 --> 00:16:56,160 Speaker 1: I mean, can you talk a little bit about the 292 00:16:56,400 --> 00:17:00,320 Speaker 1: privacy expectations when people are, you know, using websites online. 293 00:17:00,360 --> 00:17:02,720 Speaker 1: I mean, what's the difference. I'm trying to get an 294 00:17:02,760 --> 00:17:05,639 Speaker 1: idea of someone a user on wi chat kind of 295 00:17:05,680 --> 00:17:08,840 Speaker 1: what their expectations are compared to a user on let's 296 00:17:08,840 --> 00:17:14,280 Speaker 1: say a Venmo or a Facebook. So, um, many people, 297 00:17:14,800 --> 00:17:19,399 Speaker 1: at least the many I was internaturals, quite many internatural 298 00:17:19,440 --> 00:17:25,080 Speaker 1: aware that Witch had never leave, uh so anything on 299 00:17:25,119 --> 00:17:28,520 Speaker 1: the wit chat. They don't. It's not on their servers 300 00:17:28,600 --> 00:17:31,399 Speaker 1: all they are honest on their server, not for a 301 00:17:31,480 --> 00:17:34,320 Speaker 1: very short period of time, then deleted, not kept on 302 00:17:34,359 --> 00:17:37,280 Speaker 1: the server. That actually makes a Witch had a pretty 303 00:17:37,280 --> 00:17:42,160 Speaker 1: good pool for for for people's private talks, for protecting 304 00:17:42,480 --> 00:17:46,840 Speaker 1: people's privacy side, which has been doing quite well. Let 305 00:17:46,840 --> 00:17:49,679 Speaker 1: me turn to a broader question about the economy. In 306 00:17:49,680 --> 00:17:52,119 Speaker 1: our coverage of China's economy, we talk a lot and 307 00:17:52,119 --> 00:17:55,080 Speaker 1: write a lot about how China is trying to change 308 00:17:55,160 --> 00:17:58,600 Speaker 1: from an export and investment led economy to one that's 309 00:17:58,640 --> 00:18:04,679 Speaker 1: more led by consumer and services. How important has we 310 00:18:04,920 --> 00:18:08,639 Speaker 1: chat been, you know, along with other things like Ali 311 00:18:08,720 --> 00:18:13,280 Speaker 1: baba and talbau in this rise of the consumer economy, 312 00:18:13,320 --> 00:18:17,200 Speaker 1: and how how important will it be in common years? Actually, 313 00:18:17,200 --> 00:18:21,200 Speaker 1: it's quite important, It's very important. The most recent data 314 00:18:21,200 --> 00:18:25,880 Speaker 1: have been showing that the consumption that you know has 315 00:18:25,960 --> 00:18:32,080 Speaker 1: contributed to h three quarters of the total growth of 316 00:18:32,119 --> 00:18:36,240 Speaker 1: the Chinese GDP. So that's uh, the consumption has already 317 00:18:36,240 --> 00:18:40,200 Speaker 1: become I would say quietly, not very not any fanfare 318 00:18:40,520 --> 00:18:45,280 Speaker 1: becomes a major driving force of Chinese economy. The more important, 319 00:18:45,280 --> 00:18:50,000 Speaker 1: the most important part of that is a online consumption. 320 00:18:50,200 --> 00:18:53,760 Speaker 1: So typically Chinese consumption grow about ten percent nine percent 321 00:18:53,800 --> 00:18:58,000 Speaker 1: a year, but online uh consumption has growed by t 322 00:18:59,480 --> 00:19:03,840 Speaker 1: thirty per sen a year. Most recent data so much 323 00:19:03,960 --> 00:19:08,840 Speaker 1: much faster. So I think the data said of the 324 00:19:08,920 --> 00:19:12,240 Speaker 1: Chinese consumption now happen online. I'm not sure about US data. 325 00:19:12,280 --> 00:19:14,679 Speaker 1: I would say, my, my, just got feeling in the 326 00:19:14,760 --> 00:19:17,960 Speaker 1: US probably is not even that high in terms of 327 00:19:17,960 --> 00:19:21,919 Speaker 1: percentage wise online consumption, So I would say, yes, uh, 328 00:19:22,560 --> 00:19:27,080 Speaker 1: you know, online consumption has been quickly and quickly has 329 00:19:27,119 --> 00:19:30,520 Speaker 1: become a critical part of the Chinese economy. And I'm 330 00:19:30,560 --> 00:19:34,400 Speaker 1: sure the witch head and uh, and it's a football 331 00:19:34,400 --> 00:19:38,560 Speaker 1: and other online payment system or people help people depend online. 332 00:19:39,160 --> 00:19:41,480 Speaker 1: They use to spend a lot of time online on 333 00:19:41,640 --> 00:19:45,240 Speaker 1: the under cell phones and smartphones has contributed a lot 334 00:19:45,400 --> 00:19:48,360 Speaker 1: to that. Yeah, it's really something that, you know, even 335 00:19:48,400 --> 00:19:51,359 Speaker 1: as prominent as we chat spin has been a little 336 00:19:51,359 --> 00:19:55,800 Speaker 1: bit under the radar as a theme supporting China's growth. Professor, 337 00:19:55,840 --> 00:19:57,680 Speaker 1: We're going to leave it there. Thank you very much 338 00:19:57,760 --> 00:20:06,280 Speaker 1: for petty much Ye, So, Kate, did we learn today 339 00:20:06,280 --> 00:20:09,080 Speaker 1: that an app can bring down China's economy or is 340 00:20:09,119 --> 00:20:11,280 Speaker 1: it maybe a little more complicated than that. I think 341 00:20:11,320 --> 00:20:13,760 Speaker 1: it's a little more complicated. It sounds like it's more 342 00:20:13,880 --> 00:20:18,080 Speaker 1: the lubricant to kind of changing China's economy to be 343 00:20:18,200 --> 00:20:21,440 Speaker 1: more service friendly. I mean, yeah, it's amazing how much 344 00:20:21,600 --> 00:20:25,159 Speaker 1: life has changed with w chat and other kinds of 345 00:20:25,200 --> 00:20:29,040 Speaker 1: payment systems and doing business online texting in the last 346 00:20:29,080 --> 00:20:33,879 Speaker 1: few years. It's part of this broader development of China's 347 00:20:33,880 --> 00:20:36,320 Speaker 1: economy in the past four decades since they opened up 348 00:20:36,800 --> 00:20:41,080 Speaker 1: after decades of isolation. So you know, it's it's definitely 349 00:20:41,240 --> 00:20:43,840 Speaker 1: part of the story. And I really do think if 350 00:20:43,880 --> 00:20:47,040 Speaker 1: you were to take it away, there would be insanity, 351 00:20:47,359 --> 00:20:50,480 Speaker 1: as as student says, maybe not destroy the economy, but 352 00:20:50,800 --> 00:20:54,480 Speaker 1: it would be very, very highly disruptive. Well, I'm thinking 353 00:20:54,480 --> 00:20:57,200 Speaker 1: about how people freak out when like Gmail goes down, 354 00:20:57,600 --> 00:21:01,240 Speaker 1: like it's all anyone can talk about. Like Twitter, that's 355 00:21:01,240 --> 00:21:03,840 Speaker 1: all anyone's tweeting about. It's and that's just like one. 356 00:21:04,640 --> 00:21:07,280 Speaker 1: I mean, I'll be at large, but like one thing 357 00:21:07,320 --> 00:21:09,600 Speaker 1: that people use, So I can't imagine if that was 358 00:21:09,680 --> 00:21:13,600 Speaker 1: also Venmo and Facebook and Twitter and Instagram. Like well, 359 00:21:13,960 --> 00:21:16,960 Speaker 1: if you know, the Chinese government does not want one 360 00:21:17,040 --> 00:21:20,800 Speaker 1: point four billion people freaking out, So, as the professor said, 361 00:21:21,160 --> 00:21:23,400 Speaker 1: it's a slim chance that that's going to happen. But 362 00:21:24,040 --> 00:21:27,480 Speaker 1: that's another thing to keep in mind. Uh So, thanks 363 00:21:27,520 --> 00:21:30,680 Speaker 1: to our guests June Lawrence and gon Lee, Benchmark will 364 00:21:30,680 --> 00:21:32,920 Speaker 1: be back next week and until then, you can find 365 00:21:33,000 --> 00:21:35,920 Speaker 1: us on the Bloomberg Terminal and Bloomberg dot com, as 366 00:21:35,960 --> 00:21:39,520 Speaker 1: well as on iTunes, pocket casts, and Stitcher. While you're there, 367 00:21:39,600 --> 00:21:41,520 Speaker 1: take a minute to rate and review the show so 368 00:21:41,600 --> 00:21:43,720 Speaker 1: more listeners can find us and let us know what 369 00:21:43,760 --> 00:21:45,639 Speaker 1: you thought of the show. You can talk to us 370 00:21:45,680 --> 00:21:48,200 Speaker 1: and follow us on Twitter at by Kate Smith and 371 00:21:48,400 --> 00:21:51,360 Speaker 1: at Scotland and and You can also find June at 372 00:21:51,400 --> 00:22:00,560 Speaker 1: at Dune Lawrence, See you next week. Bye bye, s.