WEBVTT - 55: The App That Runs China's Economy 0:00:00.120 --> 0:00:03.880 In China. Everything happens through each at uber or venmo, 0:00:04.360 --> 0:00:17.239 or Yelp or Tinder, really everything. Hello and welcome back 0:00:17.280 --> 0:00:23.160 to the Bloomberg Benchmark Podcast. It's Thursday September. I'm Scott 0:00:23.239 --> 0:00:26.799 Lanman and economics editor at Bloomberg News in Washington, and 0:00:26.840 --> 0:00:29.920 I'm Kate Smith, editor here in New York. So, okay, 0:00:30.240 --> 0:00:33.479 which apps do you use on your smartphone? Most frequently? 0:00:33.800 --> 0:00:37.239 The Bloomberg Anywhere app? Unfortunately I'm a little addicted to. 0:00:37.680 --> 0:00:41.120 But I know our guest is giving us the loser 0:00:41.240 --> 0:00:46.919 symbol for let's see, mostly Snapchat, Instagram. I'm a I'm 0:00:46.960 --> 0:00:52.120 a millennial, so shamefully, what about you? You Facebook lighter Venmo? 0:00:52.880 --> 0:00:54.760 I just got rid of Facebook. I'm really proud of 0:00:54.800 --> 0:00:57.800 myself for that text messaging. I do text message. Yes, 0:00:57.920 --> 0:01:00.720 what about you, Scott? I would say definitely the Bloomberg 0:01:00.760 --> 0:01:04.679 That's my primary app, but yet but also Facebook, Twitter 0:01:04.920 --> 0:01:09.039 been using Venmo to pay our babysitter recently. Text messaging. 0:01:09.600 --> 0:01:12.520 But you know, I lived in China for a few years, 0:01:12.640 --> 0:01:15.560 and if you happen to be in China, you would 0:01:15.560 --> 0:01:19.240 have just one app for many of those functions. In 0:01:19.440 --> 0:01:23.759 Chinese it's called wasein, which roughly translates as micro message, 0:01:23.800 --> 0:01:27.520 and it's known as we chat in English. Now, when 0:01:27.520 --> 0:01:30.080 I was there, I was just using it for occasionally 0:01:30.120 --> 0:01:33.560 messaging with friends, but I was really just barely scratching 0:01:33.600 --> 0:01:36.800 the surface. And over the past few years, use of 0:01:36.840 --> 0:01:40.440 we chat has exploded and seems to permeate every part 0:01:40.520 --> 0:01:43.640 of people's lives, and I think it probably accounts for 0:01:44.080 --> 0:01:47.840 a good chunk of China's GDP. We're an economic podcast, 0:01:47.880 --> 0:01:50.240 and that's what we like to talk about here. So 0:01:50.440 --> 0:01:52.760 if it were to shut down for whatever reason, it 0:01:52.800 --> 0:01:56.280 could take a slice of the world's second largest economy 0:01:56.320 --> 0:01:59.040 down with it. And we're talking about seven hundred and 0:01:59.080 --> 0:02:02.559 sixty million users, and that's more than double the entire 0:02:02.600 --> 0:02:06.360 population of the United States, right, yeah, yeah, yeah, well more. 0:02:06.880 --> 0:02:10.919 That's incredible. And the company behind we chat, ten Cent. 0:02:11.000 --> 0:02:14.040 They're worth more than two hundred and fifty billion dollars, 0:02:14.080 --> 0:02:16.440 which that makes it one of the most i mean, 0:02:16.520 --> 0:02:19.440 i'm sorry, the most valuable company outside of the United 0:02:19.480 --> 0:02:23.840 States and ranks it tenth worldwide overall. Yeah, I mean, 0:02:23.880 --> 0:02:27.520 it's just unbelievable to think about that. But joining us 0:02:27.560 --> 0:02:30.840 to help explain all this is our colleague June Lawrence, 0:02:30.880 --> 0:02:33.320 who's going to tell us about what it was like 0:02:33.440 --> 0:02:36.640 to use we Chat in China. Done as a writer 0:02:36.720 --> 0:02:39.520 for Bloomberg in New York. She speaks Mandarin and lived 0:02:39.520 --> 0:02:42.760 in China for about five years, most recently in Beijing 0:02:42.840 --> 0:02:46.240 as a correspondent for Bloomberg. Now, she's a good test 0:02:46.320 --> 0:02:49.160 case for the magic of we chat in China because 0:02:49.160 --> 0:02:51.840 she left Beijing in two thousand nine before we Chat 0:02:51.880 --> 0:02:57.040 even existed, and recently went there and used it a lot. Hey, Dune, Hey, 0:02:57.040 --> 0:03:00.440 thanks for being with us. Yeah, I'm love we chat. 0:03:01.040 --> 0:03:03.639 So dude, can you tell us a little bit about 0:03:03.720 --> 0:03:06.720 we Chat? How is it different than what Americans tend 0:03:06.720 --> 0:03:10.320 to use their smartphones for. Well, again, I'm also a 0:03:10.360 --> 0:03:12.960 good test case because until, like fairly recently, I had 0:03:12.960 --> 0:03:18.040 a flip phone. I'm not joking, so I'm just so. 0:03:18.120 --> 0:03:20.440 I'm also a test case for like just the magic 0:03:20.760 --> 0:03:25.800 of mobile technology and generally, um, So, the main difference 0:03:25.840 --> 0:03:29.440 is that in China everything happens through we Chat, really everything. 0:03:30.120 --> 0:03:32.960 So all of those separate apps you have for Uber 0:03:33.400 --> 0:03:38.880 or Venmo or Yelp or Tinder, none of which I have, 0:03:39.080 --> 0:03:41.560 by the way, but I know they exist and I 0:03:41.600 --> 0:03:43.800 know a lot of people use them. And in China, 0:03:44.000 --> 0:03:47.880 all those things happen within the wee chat ecosystem. It 0:03:47.960 --> 0:03:50.160 looks when you open it up, you know, like what's 0:03:50.200 --> 0:03:52.480 app doesn't look that different from a basic messaging app. 0:03:53.000 --> 0:03:55.800 But then when you go further into the app, you know, 0:03:55.960 --> 0:03:59.440 you tap on your profile and then you tap on 0:03:59.440 --> 0:04:02.560 your wallet. It there's just this huge list of services 0:04:02.560 --> 0:04:05.040 that you can get to through we chat. So it 0:04:05.040 --> 0:04:09.920 includes ride sharing and ride hailing apps, includes like a 0:04:10.040 --> 0:04:14.640 Venmo style, you know, shared payment. It includes utilities you 0:04:14.680 --> 0:04:18.680 can pay your electric bill, include city services. You could 0:04:18.720 --> 0:04:21.440 go in and figure out the bus route you need 0:04:21.480 --> 0:04:23.520 to take, you could go in and figure out where 0:04:23.520 --> 0:04:26.080 to park your car, and then you can pay for 0:04:26.120 --> 0:04:28.440 all this through e chat. And how has this all 0:04:28.520 --> 0:04:31.360 changed life in China compared with when when you were 0:04:31.400 --> 0:04:34.599 there and what you saw more recently. It's just made 0:04:34.760 --> 0:04:38.200 everything so much easier. I mean, you talk about and 0:04:38.440 --> 0:04:41.600 I'm saying this not in economic sense, but it's just efficient. 0:04:41.720 --> 0:04:46.200 There's efficiencies and it makes everything so much easier from 0:04:46.200 --> 0:04:49.080 a business perspective too, So that's got to have huge 0:04:49.360 --> 0:04:52.480 economic knock on effects. But one thing that we can't 0:04:52.520 --> 0:04:54.880 forget when we're talking about, you know, apps in China, 0:04:54.960 --> 0:04:57.080 especially when it comes to social media, is that so 0:04:57.120 --> 0:04:59.640 many of them are not usable in mainland China. So 0:04:59.680 --> 0:05:04.560 I'm think king of Facebook and Twitter, right, those aren't Yeah, 0:05:04.680 --> 0:05:07.400 so so much is that contribute to we chat success? 0:05:07.520 --> 0:05:10.160 I think that contributes a great, a great, great deal 0:05:10.240 --> 0:05:13.120 to it. I mean on the economy side, it's never 0:05:13.160 --> 0:05:16.240 been an economy with very strong services in a lot 0:05:16.279 --> 0:05:22.720 of ways, um, And it's also just on the internet side. Obviously, 0:05:23.040 --> 0:05:25.320 there are a lot of restrictions on the internet. It's 0:05:25.320 --> 0:05:28.760 a very specific space. A lot of foreign companies have 0:05:28.880 --> 0:05:32.640 been barred from providing services on the Chinese Internet. So 0:05:32.839 --> 0:05:36.039 that that has definitely contributed to we chat success and 0:05:37.080 --> 0:05:39.400 means to a certain extent that you know, whether it 0:05:39.440 --> 0:05:42.839 can move beyond China is an open question, and it 0:05:42.880 --> 0:05:45.520 hasn't really been very successful in doing that. But also 0:05:45.760 --> 0:05:48.159 China's a huge market. Do they need to move beyond China? 0:05:48.680 --> 0:05:50.560 I mean I was reading something about we Chat a 0:05:50.600 --> 0:05:52.960 couple of days ago talking about how little they've really 0:05:53.000 --> 0:05:56.000 focused on attracting non Chinese customers, and like they were 0:05:56.000 --> 0:05:58.359 talking about like the stickers that you can use and 0:05:58.400 --> 0:06:00.440 they have tons and tons and tons as the circles 0:06:00.440 --> 0:06:02.719 that you can use for Spring Festival, for example. But 0:06:02.839 --> 0:06:05.760 I think like when you searched Ramadan, there was virtually nothing, 0:06:05.880 --> 0:06:08.040 So I mean, why has the company not even I mean, 0:06:08.040 --> 0:06:10.279 it sounds like they're not even interested in really bringing 0:06:10.279 --> 0:06:13.720 this outside of or I mean, I guess anything besides 0:06:13.800 --> 0:06:16.919 the shell of the messaging service outside of China. I mean, 0:06:16.920 --> 0:06:19.440 it doesn't really sound like there's any incentive for them 0:06:19.480 --> 0:06:22.440 to do so, I don't know, I can't really answer that, 0:06:22.480 --> 0:06:24.920 but I think I think they have definitely made efforts, 0:06:25.080 --> 0:06:28.320 but it's a it's basically a totally different business outside 0:06:28.360 --> 0:06:32.119 of China, right, It's a totally different endeavor inside China. 0:06:32.200 --> 0:06:35.440 And also just culturally now like we Chat has formed 0:06:35.440 --> 0:06:37.320 the culture. People are so used to it, and they're 0:06:37.360 --> 0:06:39.640 so used to going through we Chat for everything that 0:06:39.800 --> 0:06:42.080 is just you know, they don't have to do that much. 0:06:42.120 --> 0:06:44.720 They keep on offering. They have this incredible pace of 0:06:44.720 --> 0:06:49.719 offering new services and new platforms. And I was thinking, Scott, 0:06:49.760 --> 0:06:52.919 when you said, how we Chat if it just disappeared, 0:06:52.920 --> 0:06:54.760 would take out like a large chunk of the g 0:06:54.880 --> 0:06:57.360 d P. I was just thinking more, it would be 0:06:57.400 --> 0:07:00.400 sort of mass insanity. People would just lose their minds. 0:07:00.520 --> 0:07:05.680 It's so it's so much something you depend on. Is 0:07:05.680 --> 0:07:09.200 it possible to live your life in China, you know, 0:07:09.320 --> 0:07:12.600 no matter what age you are or what business or 0:07:12.640 --> 0:07:16.400 who your employer is without having we Chat these days, 0:07:16.720 --> 0:07:20.160 I'm sure it is. One guy I talked to who 0:07:20.640 --> 0:07:23.200 works on a we Chat based company that does English tutoring, 0:07:23.760 --> 0:07:27.000 made this funny comment that I that I loved, which 0:07:27.040 --> 0:07:29.560 was that it's sort of this socially awkward thing to 0:07:29.640 --> 0:07:32.920 not use we chat. So it's like he was grasping 0:07:32.960 --> 0:07:35.000 for an analogy and he said, it's sort of like 0:07:35.120 --> 0:07:38.720 refusing to wear shoes and going everywhere barefoot. So I'm 0:07:38.720 --> 0:07:40.840 sure that there are people who do it, obviously, but 0:07:41.520 --> 0:07:44.240 you know, if you're in the mainstream, you're using we chat. 0:07:44.520 --> 0:07:46.560 So I have a question for you. I'm thinking about 0:07:46.560 --> 0:07:50.840 like the evolution of like Facebook, at Twitter, Instagram, now snapchat. 0:07:51.840 --> 0:07:53.720 Facebook when it first came out was like, you know, 0:07:53.720 --> 0:07:56.000 the first adopters, and it was your younger people. It 0:07:56.080 --> 0:07:58.240 was cool to use it, and now Facebook is really 0:07:58.280 --> 0:08:00.680 just like you know, everyone's grandparents are on it, it's 0:08:00.680 --> 0:08:02.680 your aunts and uncle and now people don't really use 0:08:02.720 --> 0:08:05.560 it anymore. They moved over to Instagram, and now it's 0:08:05.560 --> 0:08:08.480 like now everyone's aunt and grandmother is on Instagram, So 0:08:08.560 --> 0:08:11.040 now they're moving over to Snapchat. Like, is there any 0:08:11.080 --> 0:08:14.520 kind of like evolution of moving onto the latest greatest 0:08:14.520 --> 0:08:16.320 thing in China? Or is it just kind of like 0:08:16.400 --> 0:08:19.440 we chats it and that's it doesn't matter how new 0:08:19.440 --> 0:08:22.880 and cool it is, people are always using it. Well, yeah, 0:08:22.920 --> 0:08:25.440 I mean, I think there's a difference between something that 0:08:25.520 --> 0:08:27.720 you like to use because it's cool and something that 0:08:27.800 --> 0:08:31.640 has a fundament mental impact on the ease with which 0:08:31.680 --> 0:08:35.280 you live your life. And that is the difference between 0:08:35.320 --> 0:08:39.000 we Chat in China and Facebook outside of China, and 0:08:39.040 --> 0:08:41.000 I think it's something that Facebook is trying to address. 0:08:41.760 --> 0:08:45.120 But that is something that makes me chat extremely valuable, 0:08:45.520 --> 0:08:49.520 you know, and extremely powerful because it's not a coolness factor. 0:08:50.000 --> 0:08:52.840 There are cool elements to it, and they are introducing 0:08:53.200 --> 0:08:58.000 new elements all the time, but the basic utility is 0:08:58.040 --> 0:09:00.600 more sort of fundamental to your life than it is 0:09:00.679 --> 0:09:04.040 for us using an app here, right, all right, for 0:09:04.120 --> 0:09:07.079 some more perspective, let's bring in gond Lee, who's joining 0:09:07.160 --> 0:09:10.520 us on his cell phone from China. He's an economics 0:09:10.520 --> 0:09:14.080 professor at Texas A and M University, but he also 0:09:14.120 --> 0:09:17.480 has another major role as director of the China Household 0:09:17.520 --> 0:09:22.400 Finance Survey at the Southwestern University of Finance and Economics 0:09:22.440 --> 0:09:28.120 in the city of chang Do. Professor Scott, thanks for 0:09:28.200 --> 0:09:31.120 hiving me here now. Professor, you spend a lot of 0:09:31.160 --> 0:09:34.400 time in both the US and China. What are the 0:09:34.440 --> 0:09:37.200 main differences you see and how people use their phones 0:09:37.280 --> 0:09:39.960 in the two countries and how people use we chat 0:09:39.960 --> 0:09:43.960 in China. So lots of people using cell phones, lots 0:09:43.960 --> 0:09:46.440 of people on the smartphones, and all the time. This 0:09:46.600 --> 0:09:50.360 is posed to in the United States and in China. 0:09:50.600 --> 0:09:54.360 So the major difference from years ago is you see 0:09:54.360 --> 0:09:56.480 everywhere people just look at the phones. In still of 0:09:56.559 --> 0:10:00.079 interact with were saying, nine, you don't interact with you 0:10:00.400 --> 0:10:02.920 with a person around you, You just look at your 0:10:02.960 --> 0:10:06.320 cell phones. I think for smartphones makes people one way 0:10:06.360 --> 0:10:08.480 to makes people close to each other from far away. 0:10:08.559 --> 0:10:12.960 Another way I think actually makes people even for people 0:10:13.000 --> 0:10:16.720 close to you far away. So I don't see difference 0:10:16.760 --> 0:10:19.400 in that in that one. But in terms of which had, yes, 0:10:19.559 --> 0:10:23.080 I agree with everything just said. The witch had which 0:10:23.120 --> 0:10:26.880 has become a major part of the people's daily life. 0:10:27.200 --> 0:10:30.280 And there's no estimate, but I would guess personally, I 0:10:30.280 --> 0:10:33.920 would guess that people spend let's say hours a day 0:10:34.080 --> 0:10:36.760 on witch Head. At least how many hours a day 0:10:36.760 --> 0:10:41.000 do you spend on wit Chat? I spend maybe two hours, 0:10:41.280 --> 0:10:44.400 one hour, two hours on days the things I use, 0:10:44.520 --> 0:10:47.559 which had to travel a lot, even within China, so 0:10:47.600 --> 0:10:51.520 I use which had as a major work too. I 0:10:51.640 --> 0:10:56.840 talked to my people using witchad. I basically bring people together, 0:10:56.920 --> 0:11:00.120 have conferences on witch Head. So it's been not me 0:11:00.280 --> 0:11:04.000 just for entertainment. Mostly is not for intedtaim Mostly is 0:11:04.000 --> 0:11:07.719 actually is a tool people use for the productivity for 0:11:07.840 --> 0:11:11.079 two to work together. It sounds like it really permeates 0:11:11.120 --> 0:11:14.760 people's lives there. But let's talk about some broader perspective. 0:11:15.280 --> 0:11:18.440 If you remember ten Cent, the company behind wa Chat, 0:11:19.080 --> 0:11:23.480 they're actually China's most valuable company based on market capitalization, 0:11:23.960 --> 0:11:26.480 and by that measure, it's bigger than you know some 0:11:26.600 --> 0:11:31.679 major US companies like JP, Morgan, Wells Fargo, even Walmart. 0:11:32.000 --> 0:11:36.160 Does it contribute to China's GDP the way those companies 0:11:36.200 --> 0:11:41.280 contribute to the US economy. So Penson major profits are 0:11:41.360 --> 0:11:46.559 coming from online games. The wait chad produced very little 0:11:46.760 --> 0:11:50.760 revenues for Tencent. I think Penson has not yet figured 0:11:50.800 --> 0:11:54.040 out how to make money, or basically they're not interested 0:11:54.080 --> 0:11:57.200 in making money via their you know, the dominance on 0:11:57.240 --> 0:12:00.520 the communication tools over the wait chat. About we chat 0:12:00.559 --> 0:12:03.240 has a major tool. As I mentioned that it has 0:12:03.280 --> 0:12:07.440 contributed to the Chinese GDP, it's very difficult to calculate. 0:12:07.679 --> 0:12:10.920 I was thinking about how to calculate that which had 0:12:11.000 --> 0:12:16.640 contribution to the GDP. It's it's difficult, right, And I'm sure, 0:12:16.679 --> 0:12:20.040 I'm sure it's difficult to calculate how Facebook or Twitter 0:12:20.320 --> 0:12:23.679 contribute to us GDP. One thing that I focused on 0:12:23.720 --> 0:12:26.680 a lot when I was visiting in April was just 0:12:26.760 --> 0:12:29.080 I thought how interesting it is that it makes that 0:12:29.120 --> 0:12:32.600 we Chat makes it so easy for startups to kind 0:12:32.640 --> 0:12:36.240 of throw themselves out there and to raise money, to 0:12:36.320 --> 0:12:39.599 get followers and you know, create these sort of mini businesses. 0:12:40.200 --> 0:12:45.000 So anecdotally, even though Tencent hasn't really figured out how 0:12:45.000 --> 0:12:50.000 to monetize we chat for their own purposes, I mean, anecdotally, 0:12:50.040 --> 0:12:55.040 I think it seems to be promoting consumer spending, promoting 0:12:55.120 --> 0:12:59.520 job creation and entrepreneurial endeavors. Things like that. So again, 0:12:59.520 --> 0:13:01.840 I mean I read that it would it's hard to measure, 0:13:01.920 --> 0:13:05.000 but just if you talk to people, the ease is 0:13:05.040 --> 0:13:07.480 not just in daily things like buying your food or 0:13:07.600 --> 0:13:10.320 hailing your taxi. The ease in is in sort of 0:13:10.320 --> 0:13:15.679 more sharply economic things like raising money or starting your 0:13:15.679 --> 0:13:18.520 own business. Well do you get that sense, professors that 0:13:18.559 --> 0:13:21.839 it has kind of helped in some intangible or entrepreneurial 0:13:21.840 --> 0:13:25.760 ways that aren't measured in the GDP statistics. There are 0:13:25.800 --> 0:13:29.640 other similar products, one of them which I've been used 0:13:29.960 --> 0:13:33.079 before I thought served as a similar tool like I 0:13:33.080 --> 0:13:35.880 don't even heard of. That called Dindin is actually made 0:13:35.880 --> 0:13:38.920 by ali Baba once upon a time. There are a 0:13:38.960 --> 0:13:43.400 few pire of time ali Baba requires their communication official 0:13:43.440 --> 0:13:46.640 complications via Dindin instead of which had. So that's what 0:13:46.800 --> 0:13:49.600 that's how I have to use it, install the Dindin 0:13:50.679 --> 0:13:53.800 in my cell phone. My point is, yes, which had 0:13:53.880 --> 0:13:59.840 indeed helps a lot, and all these entrepreneur activities or 0:14:00.080 --> 0:14:03.240 other activities a lot. But if there were no witch Head, 0:14:03.440 --> 0:14:06.959 I'm sure there other softwarees would fill in the gap. 0:14:07.679 --> 0:14:12.040 My point here is it's a technology innovation. It's a 0:14:12.720 --> 0:14:16.480 it's a smartphone era of the smartphone have made all 0:14:16.559 --> 0:14:22.160 these activities become much easier, makes our lives, it makes 0:14:22.160 --> 0:14:27.800 work become much easier. So it's not necessary the uh, 0:14:27.920 --> 0:14:31.440 it's necessary the witch head itself, I would say, it's 0:14:31.440 --> 0:14:33.880 a smartphone itself, I think, which has done a wonderful 0:14:33.960 --> 0:14:40.920 job facility the process of people using smartphones, and so 0:14:41.120 --> 0:14:45.120 that's of course it's I'm sure it is that case. Yeah, 0:14:45.160 --> 0:14:48.720 But let's let's say, for example, ten Cent ran into 0:14:48.760 --> 0:14:51.640 some trouble with the government and they decided to suspend 0:14:52.160 --> 0:14:55.360 the app for some reason. Would that be disruptive to 0:14:56.040 --> 0:14:59.040 hundreds of millions of people until they figure out how 0:14:59.080 --> 0:15:03.040 to communicator you business? Otherwise I would say that hospital 0:15:03.160 --> 0:15:06.920 is very slim. I know the Tencent team reasonably well. 0:15:07.240 --> 0:15:11.120 I was very very careful in terms of not doing 0:15:11.200 --> 0:15:14.120 anything offending the government. But yes, and I think that 0:15:14.360 --> 0:15:20.480 that interruption, of which if you're happened, it will disrupted 0:15:21.600 --> 0:15:23.800 a lot of the country, but for a short period 0:15:23.800 --> 0:15:27.800 of time because other software we're filling in the gap quickly. 0:15:28.160 --> 0:15:29.840 I wanted to talk a little bit about kind of 0:15:29.840 --> 0:15:32.560 the downside of having one company, because you were saying, 0:15:32.560 --> 0:15:34.920 you know, other other companies could fill that vacuum, but 0:15:35.000 --> 0:15:37.040 as it stands up, it sounds like there's kind of 0:15:37.080 --> 0:15:39.240 one that dominates, and I wanted to talk to you 0:15:39.240 --> 0:15:41.520 about the downside of that. So here in the US, 0:15:41.560 --> 0:15:43.240 I know that a lot of people get very concerned 0:15:43.240 --> 0:15:47.080 about companies like Google and Facebook and kind of the 0:15:47.160 --> 0:15:50.040 ubiquitous use of those and all of the information that 0:15:50.080 --> 0:15:52.200 they track on those users, you know, to the point 0:15:52.280 --> 0:15:56.480 where you know you see very very specialized advertisements when 0:15:56.560 --> 0:16:00.120 you're using those platforms. Is there any concern with in 0:16:00.280 --> 0:16:03.600 China about that happening on we Chat because it's it's 0:16:03.600 --> 0:16:06.560 so much more information and it's so much more centralized. 0:16:07.760 --> 0:16:11.560 So at this stage, I don't think there's any concerns. 0:16:12.080 --> 0:16:18.240 Which had has been rather careful not offending people's privacy, 0:16:18.640 --> 0:16:23.040 not pushing up too many advertisement pencon knows and everybody 0:16:23.080 --> 0:16:26.200 knows that which can make a lot of money, they 0:16:26.200 --> 0:16:27.920 can use which had to make a lot of money 0:16:27.960 --> 0:16:32.240 for sure because of the ecosystem, because of the so 0:16:32.320 --> 0:16:34.520 many people are using it and so many people depend 0:16:34.600 --> 0:16:38.080 on it. But Pence has not found that, not found 0:16:38.080 --> 0:16:42.320 it because they're very very careful about to raise people's 0:16:42.320 --> 0:16:47.000 concern about their dominances online and use that dominant dominance 0:16:47.040 --> 0:16:50.080 to online to to make money or to do anything else. 0:16:51.040 --> 0:16:54.440 So not yet in you're traveling between the US and China, 0:16:54.520 --> 0:16:56.160 I mean, can you talk a little bit about the 0:16:56.400 --> 0:17:00.320 privacy expectations when people are, you know, using websites online. 0:17:00.360 --> 0:17:02.720 I mean, what's the difference. I'm trying to get an 0:17:02.760 --> 0:17:05.639 idea of someone a user on wi chat kind of 0:17:05.680 --> 0:17:08.840 what their expectations are compared to a user on let's 0:17:08.840 --> 0:17:14.280 say a Venmo or a Facebook. So, um, many people, 0:17:14.800 --> 0:17:19.399 at least the many I was internaturals, quite many internatural 0:17:19.440 --> 0:17:25.080 aware that Witch had never leave, uh so anything on 0:17:25.119 --> 0:17:28.520 the wit chat. They don't. It's not on their servers 0:17:28.600 --> 0:17:31.399 all they are honest on their server, not for a 0:17:31.480 --> 0:17:34.320 very short period of time, then deleted, not kept on 0:17:34.359 --> 0:17:37.280 the server. That actually makes a Witch had a pretty 0:17:37.280 --> 0:17:42.160 good pool for for for people's private talks, for protecting 0:17:42.480 --> 0:17:46.840 people's privacy side, which has been doing quite well. Let 0:17:46.840 --> 0:17:49.679 me turn to a broader question about the economy. In 0:17:49.680 --> 0:17:52.119 our coverage of China's economy, we talk a lot and 0:17:52.119 --> 0:17:55.080 write a lot about how China is trying to change 0:17:55.160 --> 0:17:58.600 from an export and investment led economy to one that's 0:17:58.640 --> 0:18:04.679 more led by consumer and services. How important has we 0:18:04.920 --> 0:18:08.639 chat been, you know, along with other things like Ali 0:18:08.720 --> 0:18:13.280 baba and talbau in this rise of the consumer economy, 0:18:13.320 --> 0:18:17.200 and how how important will it be in common years? Actually, 0:18:17.200 --> 0:18:21.200 it's quite important, It's very important. The most recent data 0:18:21.200 --> 0:18:25.880 have been showing that the consumption that you know has 0:18:25.960 --> 0:18:32.080 contributed to h three quarters of the total growth of 0:18:32.119 --> 0:18:36.240 the Chinese GDP. So that's uh, the consumption has already 0:18:36.240 --> 0:18:40.200 become I would say quietly, not very not any fanfare 0:18:40.520 --> 0:18:45.280 becomes a major driving force of Chinese economy. The more important, 0:18:45.280 --> 0:18:50.000 the most important part of that is a online consumption. 0:18:50.200 --> 0:18:53.760 So typically Chinese consumption grow about ten percent nine percent 0:18:53.800 --> 0:18:58.000 a year, but online uh consumption has growed by t 0:18:59.480 --> 0:19:03.840 thirty per sen a year. Most recent data so much 0:19:03.960 --> 0:19:08.840 much faster. So I think the data said of the 0:19:08.920 --> 0:19:12.240 Chinese consumption now happen online. I'm not sure about US data. 0:19:12.280 --> 0:19:14.679 I would say, my, my, just got feeling in the 0:19:14.760 --> 0:19:17.960 US probably is not even that high in terms of 0:19:17.960 --> 0:19:21.919 percentage wise online consumption, So I would say, yes, uh, 0:19:22.560 --> 0:19:27.080 you know, online consumption has been quickly and quickly has 0:19:27.119 --> 0:19:30.520 become a critical part of the Chinese economy. And I'm 0:19:30.560 --> 0:19:34.400 sure the witch head and uh, and it's a football 0:19:34.400 --> 0:19:38.560 and other online payment system or people help people depend online. 0:19:39.160 --> 0:19:41.480 They use to spend a lot of time online on 0:19:41.640 --> 0:19:45.240 the under cell phones and smartphones has contributed a lot 0:19:45.400 --> 0:19:48.360 to that. Yeah, it's really something that, you know, even 0:19:48.400 --> 0:19:51.359 as prominent as we chat spin has been a little 0:19:51.359 --> 0:19:55.800 bit under the radar as a theme supporting China's growth. Professor, 0:19:55.840 --> 0:19:57.680 We're going to leave it there. Thank you very much 0:19:57.760 --> 0:20:06.280 for petty much Ye, So, Kate, did we learn today 0:20:06.280 --> 0:20:09.080 that an app can bring down China's economy or is 0:20:09.119 --> 0:20:11.280 it maybe a little more complicated than that. I think 0:20:11.320 --> 0:20:13.760 it's a little more complicated. It sounds like it's more 0:20:13.880 --> 0:20:18.080 the lubricant to kind of changing China's economy to be 0:20:18.200 --> 0:20:21.440 more service friendly. I mean, yeah, it's amazing how much 0:20:21.600 --> 0:20:25.159 life has changed with w chat and other kinds of 0:20:25.200 --> 0:20:29.040 payment systems and doing business online texting in the last 0:20:29.080 --> 0:20:33.879 few years. It's part of this broader development of China's 0:20:33.880 --> 0:20:36.320 economy in the past four decades since they opened up 0:20:36.800 --> 0:20:41.080 after decades of isolation. So you know, it's it's definitely 0:20:41.240 --> 0:20:43.840 part of the story. And I really do think if 0:20:43.880 --> 0:20:47.040 you were to take it away, there would be insanity, 0:20:47.359 --> 0:20:50.480 as as student says, maybe not destroy the economy, but 0:20:50.800 --> 0:20:54.480 it would be very, very highly disruptive. Well, I'm thinking 0:20:54.480 --> 0:20:57.200 about how people freak out when like Gmail goes down, 0:20:57.600 --> 0:21:01.240 like it's all anyone can talk about. Like Twitter, that's 0:21:01.240 --> 0:21:03.840 all anyone's tweeting about. It's and that's just like one. 0:21:04.640 --> 0:21:07.280 I mean, I'll be at large, but like one thing 0:21:07.320 --> 0:21:09.600 that people use, So I can't imagine if that was 0:21:09.680 --> 0:21:13.600 also Venmo and Facebook and Twitter and Instagram. Like well, 0:21:13.960 --> 0:21:16.960 if you know, the Chinese government does not want one 0:21:17.040 --> 0:21:20.800 point four billion people freaking out, So, as the professor said, 0:21:21.160 --> 0:21:23.400 it's a slim chance that that's going to happen. But 0:21:24.040 --> 0:21:27.480 that's another thing to keep in mind. Uh So, thanks 0:21:27.520 --> 0:21:30.680 to our guests June Lawrence and gon Lee, Benchmark will 0:21:30.680 --> 0:21:32.920 be back next week and until then, you can find 0:21:33.000 --> 0:21:35.920 us on the Bloomberg Terminal and Bloomberg dot com, as 0:21:35.960 --> 0:21:39.520 well as on iTunes, pocket casts, and Stitcher. While you're there, 0:21:39.600 --> 0:21:41.520 take a minute to rate and review the show so 0:21:41.600 --> 0:21:43.720 more listeners can find us and let us know what 0:21:43.760 --> 0:21:45.639 you thought of the show. You can talk to us 0:21:45.680 --> 0:21:48.200 and follow us on Twitter at by Kate Smith and 0:21:48.400 --> 0:21:51.360 at Scotland and and You can also find June at 0:21:51.400 --> 0:22:00.560 at Dune Lawrence, See you next week. Bye bye, s.