Especially Chinese tech companies.

Tencent is investing millions in Reddit.

Which is weird, because Reddit is blocked in China.

So what's their real motivation?

Welcome back to China Uncensored.

I'm Chris Chappell.

Reddit.

The tech company that calls itself

the “front page of the internet”

is looking to expand it.

Reddit has just raised 300 million dollars

in the company's fourth round of funding.

Half of that is from a major Chinese tech company.

But who cares if it's from a Chinese company?

Because this round funding puts Reddit's valuation

at an astronomical 3 billion dollars.

Now that's a lot of money,

especially if you consider what Reddit actually is.

It's basically a no-frills online message board

where people create discussion threads called Subreddits

and then vote up or down posts

they think are awesome or lame.

Example—a Subreddit called 'funny'.

Where Reddit user B_rodriguezzz

posted a photo captioned

Jamaican Super Lotto winner taking NO CHANCES

...was upvoted by 119 thousand people.

Or the Subreddit “Who's the dumbest person you've ever met?”

which features a post by a teacher

about a 9th grade student who allegedly

“ate an entire 24 pack of crayons,

puked,

and then did it again the next day”

and “tazed himself in the neck before a football game.”

NoahtheRed's post was upvoted nearly 18 thousand times.

Anyway, you get the idea.

This company is worth 3 billion dollars.

And that's of course why Chinese tech giant Tencent

is investing a whopping $150 million in Reddit.

Tencent is headed by Ma Huateng,

also known as Pony Ma...

Who's apparently trying to figure out exactly

why offering to invest 150 million in Reddit

has sparked such a torrent of fury.

See, Reddit users started rebelling

as soon as they heard about the Chinese funding deal.

Rebelling how?

By posting content that would be banned in China.

Like Tank Man,

the guy who famously stood up to stop tanks

that were rolling out of Tiananmen Square in 1989

that had just run over pro-democracy protesters,

including these students on hunger strike.

Or also on Tiananmen Square,

but more recently

police brutally arresting practitioners

of the banned Falun Gong spiritual group.

But not all the backlash is gloomy.

There's the cheery design proposal

for Reddit's new logo

featuring Winnie-the-Pooh.

The cuddly bear is often censored in China,

because of its obvious resemblance

to Chinese leader Xi Jinping.

But don't worry,

it's unlikely Xi Jinping will see

all those Winnie-the-Pooh memes,

because since last August,

Reddit itself has has been banned in China.

Now Reddit users are afraid that their beloved platform,

known for uncensored free speech,

is going to get censored to meet

the demands of the Chinese Communist Party.

See, Tencent has a history of censoring things

the CCP doesn't like.

Its Chinese platforms QQ and WeChat

are both heavily censored,

and they work with Chinese authorities

to give them access to user data.

Amnesty International did a report back in 2016

on tech companies protecting users

against threats to privacy

and freedom of expression.

The results?

Not so good for Tencent.

“Chinese firm Tencent came bottom,”

the report reads,

“scoring zero out of 100,

ranked as the company

taking least action on messaging privacy,

and the least transparent.”

Snapchat,

which Tencent owns a 10 percent share of,

came in third from the bottom.

Who would have thought the app

that scans millions of users

with advanced facial recognition technology

so they can wear cute dog ears

would have privacy issues?

But defenders of Tencent's investment in Reddit

say that Tencent is a private company,

so there's no real danger they'd bring in censorship

or leave a back door

for the Chinese communist party to access, right?

Well, Tencent is a private company...

with Chinese characteristics.

What I mean is, in China,

pretty much every company that's made it big,

is only big because it has links to the Communist Party.

Here's Tencent CEO Pony Ma,

and another famous tech CEO, Jack Ma—

no relation—

clapping during a speech Xi Jinping gave

two months ago inside the Great Hall of the People.

Boy, they were given great seats.

In that speech where everyone was forced to clap,

Xi Jinping said that the Communist Party

would maintain leadership “over all tasks.”

That includes tech companies.

Both Jack and Pony were also honored at that event

for their “outstanding contributions” to China's economy.

So yeah, they may be called private companies.

But they're still under the direction of the Party.

According to the Financial Times,

more than 35 Chinese tech companies,

including big ones like Sina and Baidu,

have quietly set up communist party committees,

which “assess a company's daily operations

to ensure they do not stray from party objectives.”

Think of it like your company's HR department,

but one that's working for

the authoritarian state you live under.

You do not want to get called in

for that performance assessment.

But it's not all bad!

Xu Zewei,

founder of Chinese fintech platform 91 Finance,

was quoted in the Financial Times article

as saying that “to be affiliated with the Communist party

is good for our brand”

and “when recruiting,

we specifically seek out party members.”

Trey McArver, co-founder of a consultancy

that advises companies on how to do business in China,

put it even more bluntly.

“No company,

private or state-owned,

gets ahead in China without aligning itself

with the party's larger goals.”

Take a company like Huawei,

the world's biggest telecom equipment maker.

Not only does it make telecom equipment,

but it also helps the communist party

with little things on the side, like espionage.

Just last month,

the Polish government arrested a Huawei employee

on allegations of spying for China.

And federal prosecutors in the United States

are pursuing a criminal investigation of Huawei

for allegedly stealing trade secrets

from American business partners.

Investing in US technology

is one of the Chinese Communist Party's strategic objectives.

And it's not just the well-known companies like Reddit

that they're interested in.

Chinese private companies—which, again,

once they get to a certain size,

pretty much all have links to the Party—

have been investing heavily in Silicon Valley.

That's partly because they want to get in on US technology.

Why?

It's all part of China's secret plan

to rule the world through high-tech.

Just kidding.

It's not a secret plan.

It's called “Made in China 2025”,

and it's even been promoted by state-run media like CGTN.

“China has been making great efforts

to promote its manufacturing industries

since the implementation of the Made in China 2025 plan.”

According to the US Chamber of Commerce,

it's “a 10-year comprehensive blueprint

aimed at transforming China

into an advanced manufacturing leader.”

Well that doesn't sound all that dangerous.

Except experts like Michael Brown,

who runs the Pentagon's Defense Innovation Unit,

says there's a big worry in the intelligence community.

They fear the Chinese regime could get their hands on

too much sensitive U.S. technology,

transfer it back home,

and pose a threat to American national security.

"They don't play by the same rules that we do,” says Brown.

“So cybertheft is on the table

and industrial espionage is on the table.”

So China's big play in Silicon Valley

is about way more than Reddit or Snapchat.

It's about finding ways to acquire the newest technologies

and ship them back to China,

where they can be help China

dominate the world's tech industries,

inform the Chinese military,

or be useful in the state surveillance apparatus.

And just how big is China's

big play for American innovation?

This chart from Reuters

shows that since 2015,

when the Made in China 2025 plan was launched,

the amount of Chinese cash

flowing into US startups exploded.

Last year it surpassed 3 billion dollars.

Now, I'm not saying these investors

are all accessing sensitive technology.

And Chinese venture capital is still a minority

compared to American venture capital.

But according to Adam Lysenko,

an analyst for the Rhodium Group,

the risk exists that Chinese companies

could access sensitive technology “in an early stage

where U.S. government,

military and other security individuals

haven't had a full chance to evaluate

the implications of those technologies."

But there is is some good news

on the national security front.

The Trump administration has taken steps

to curb the risk of Chinese investment

in US technology.

Trump signed a new law clamping down on

China's access to American innovation.

It broadens the authority

of the Committee on Foreign Investment in the United States.

That's the committee that examines national security risks

of foreign investments in the U.S.

Already the committee has recommended blocking deals.

They've done that several times so far,

including putting a halt to

a Chinese state-backed company's attempt

to buy a US semiconductor company for 1.3 billion.

And the administration's harder line

on protecting American intellectual property

has slowed the flow of Chinese funding.

And those deals have mostly stopped,

partly because of the hassle of having to deal with

a potential CFIUS review.

So the real danger of Chinese investment in US technology

is not so much about social media sites like Reddit.

But, does Tencent's investment in Reddit

mean that Reddit posts will be censored

to please the Chinese Communist Party?

Right now, it's unlikely,

unless Reddit wants to get unblocked in China

and is willing to self-censor to do it.

Other US tech companies,

like Facebook and Google,

have been willing to self-censor

to get into the Chinese market.

Which is bad,

because it normalizes

and legitimizes state censorship.

But Tencent's Reddit investment

seems separate from that, for now.

So hopefully Reddit posts like this one

can escape the long reach of Chinese censors.

Unless Reddit users give it a thumbs down.

And before we go,

it's time for me to answer a question

from one of you who supports China Uncensored