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It was a close call, but Tencent won the race to become China’s first $500bn technology giant — a milestone for the nation and for the tech sector at large.

The Hong Kong-listed social media group may still be less known outside China but alongside rival Alibaba, which is snapping at its heels with a $474bn market capitalisation, Tencent dominates its home turf.

Alibaba, founded 19 years ago by former English teacher Jack Ma, started in ecommerce but now spans video, payments and bricks-and-mortar retail. Tencent, founded by Pony Ma a year later (and two months after Google), has similarly expanded from its social media beginnings — into literature, news, financial services, and shopping. More than half the near-1bn users on its wildly popular WeChat platform spend more than 90 minutes a day on the app.

The doubling of both companies’ share prices this year partly reflects some crowd-pleasing tricks. They beat expectations on earnings growth so consistently and widely that it is a wonder sellside analysts have not yet cottoned on to the trend.

US-listed Alibaba is big on show and spectacle. Exhibit one: an investor day where the chief financial officer forecast a 45-49 per cent rise in revenues. (Of course, a matter of months later that guidance was already surpassed by a bigger number.)

But mostly the rise of China’s tech giants has been about smart ideas — Tencent’s move to make a virtual version of the hongbao red gift packets traditionally given out at Chinese new year; Alibaba’s pioneering blend of online and offline retail — and mass market domination.

In the latter, they have been helped hugely by the government’s block on most international competitors: Facebook, Twitter, YouTube and Google search are all banned in China. There is little alternative to WeChat.

Amazon is available but has not made much headway in a market dominated by Alibaba platforms Tmall and Taobao, which quickly beat eBay out of the market.

The travails of Silicon Valley’s big tech groups in the US and Europe are also unlikely to be visited upon the Chinese players, at least in the same format. This points to one of the strongest weapons in China tech’s armoury. Like their US peers, Tencent and Alibaba are megacorporations that dominate every aspect of citizens’ lives and, increasingly, the lives of small businesses, restaurants, manicure parlours and high fashion. Unlike their state-owned predecessors, they are privately owned and — theoretically — answer to shareholders.

Only, they do not. Government looms large in their lives too, but for now the tensions are manageable. The relationship is a symbiotic one of aligned interests. China wants to lead in tech, so having two players chasing the market caps of Facebook et al is a plus. So is having deep-pocketed champions, who can make big hires, set up research labs across the globe, and buy start-ups overseas (a highly squeamish US regulator permitting).

Data, the accumulation of which by big companies is a source of fear in much of the world, is not quite such a big deal in China. Citizens are long used to the government knowing everything. And the government likes data. So Chinese happily punch in numbers, bank details, even images of their faces into Alibaba or Tencent. Activists and others fear that having the “wrong” friends online or posting inopportune comments could mean jeopardising visas, loans or worse.

Beijing’s internet sovereignty is also helped by having internet players who employ their own teams of censors and, mostly, avoid the appearance of what the government sees as untoward material. Since that can range from pornography to comments on Taiwan to images of Winnie the Pooh, this is no small task. But the companies believe it is worth playing ball. When they fail, as they sometimes do, reprimands and apologies follow in short order. The fear is that penalties rise along with other tensions, hints of which already appeared.

The make-up of the top tech duo is a neat reflection of today’s China. Pony Ma is a deputy of China’s National People Congress; Jack Ma has adopted the role of an unofficial soft power diplomat, promising cross-border trade and, through rural ecommerce, helping to alleviate poverty. But both have also been careful to flesh out their companies’ top ranks with former Goldman Sachs bankers.

Louise.Lucas@ft.com

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