What Tencent’s rebound says about prospects for China’s big tech

embodies the ups and downs of Chinese big tech better than its biggest tech firm of all—. Two years ago the online empire seemed unstoppable. More than a billion Chinese were using its ubiquitous services to pay, play and do much else besides. Its , such as “League of Legends”, were global hits. Tencent’s market value exceeded $900bn, and the firm was on track to become China’s first trillion-dollar company. Then the Communist Party said: . Xi Jinping, China’s paramount leader, decided that big tech’s side-effects, from distracted teenagers to the diversion of capital from strategic sectors such as , were unacceptable. Tencent was, along with the rest of China’s once-thriving digital industry, caught up in a sweeping 18-month crackdown. Regulators declared video games to be “spiritual opium”, and barred under-18s from playing more than three hours a week. Tencent’s new titles were held up by censors. At the same time, it was forced by trustbusters to tear down the walls of its apps to let other payment processors in. Last year it transferred all $36bn-worth of its stakes in .com and Meituan, two e-commerce firms, to shareholders as a dividend—in part perhaps to prop up its share price but possibly also to allay official concerns about its ubiquity. To make matters worse, Mr Xi’s draconian zero-covid policy infected Chinese consumers with a bad bout of thrift. In the third quarter of 2022 Tencent’s revenues declined by 2% year on year, its worst performance on record. By October its market capitalisation had collapsed to less than $250bn.