Digital Payments in China: Some Questions for a Pragmatist Anthropology of Money

Table of Contents

1. Digital Practices, Digital Payments and Social Hierarchies

2. Institutions and a Project of Society

3. Conclusion

4. References

Futures of money – monies of the future

1. Futures of Money – Monies of the Future. Introduction, by Horacio Ortiz, https://doi.org/10.1515/ael-2022-0116.

2. Stablecoins, Central Bank Digital Currencies and US Dollar Hegemony, by Luca Fantacci and Lucio Gobbi, https://doi.org/10.1515/ael-2020-0053.

3. Privatizing Cash: Currency and Public Goods in Sweden, by Gustav Peebles, https://doi.org/10.1515/ael-2020-0087.

4. Distributed Ledger Technology and the Future of Money and Banking, by Fred Huibers, https://doi.org/10.1515/ael-2019-0095.

5. Digital Payments in China: Some Questions for a Pragmatist Anthropology of Money, by Horacio Ortiz, https://doi.org/10.1515/ael-2021-0102.

6. Potential Implications of Retail Central Bank Digital Currency for Banking Systems Identified in the Literature and by Central Banks, by Anna Iwańczuk-Kaliska, https://doi.org/10.1515/ael-2022-0005.

This article explores institutional transformations brought about by the digitalization of payments in China to raise questions about the analysis of monetary practices and monetary hierarchies. Digital payments in China have grown dramatically in the last ten years and are today used on a regular basis by a vast majority of the population. According to different estimates, in 2020, non-cash payments constituted between 60% and 70% of total payments.^[1] That year, digital payments constituted 55% of non-cash payments and they have kept growing steadily since (SCMP, 2021; People’s Bank of China, 2022). Currently, they are dominated by the two major digital companies (Big Tech), Alibaba and Tencent. The digital currency issued by the People’s Bank of China (PBoC), the e-CNY, is relatively little used so far, although this can change in the future. Based on this, the article proposes to raise two sets of questions.

One concerns the fact that when payments are digital, money becomes digital information that can be combined with other digital information that is not monetary. Thereby, monetary relations, including monetary hierarchies, become mutually constituted with digital relations and hierarchies. This raises questions about the way in which we consider the role of money in the constitution of social relations in general and of social hierarchies in particular. The second series of questions concerns the analysis of monetary institutions, in particular the relation between the state, the financial industry and Big Tech. In the last two centuries, monetary creation and distribution has tended to revolve around national monies produced and managed by states and the financial industry. Nowadays, we must consider Big Tech as part of monetary institutions, given their growing control of monetary infrastructures, such as payment systems, and their increasing role in the distribution of money, for instance, with the development of new financial services. Within Chinese territory, the government presents digital payments as a means to reduce social inequalities and contribute to the consolidation of a national society. These imaginaries of money do not totally correspond to those of Alibaba and Tencent, even if these companies have important relations with the state. These companies are not state-owned and do not only operate in the monetary and financial sector. Their operations, strategies and orientations are thus partly different than those of the current arrangement between states and the financial industry. Integrating the Big Tech in the analysis of monetary institutions implies taking into account their imaginaries of money and organizational concerns.

The article proposes to mobilize the insights of pragmatist approaches of money to address the transformation of social hierarchies and the multiple imaginaries of money at play in the institutional arrangement including Big Tech. I focus on payments within the Chinese territory so many elements may not be extrapolated to situations elsewhere, especially as the operations of the GAFAM^[2] are less concentrated within one state’s territory and their relations with the US government differ from those of the China-based Big Tech with the Chinese government. Nevertheless, as I will address through the article, this case raises general theoretical questions that are hopefully useful to think about the development of digital payments elsewhere.

Pragmatist approaches of money stress the idea that the meaning of money varies depending on its uses, so that at any time there are a multiplicity of meanings that constitute monetary relations (Dodd, 2014; Guyer, 2004; Hart & Ortiz, 2014; Maurer, 2006; Zelizer, 2009). This has important implications for the analysis of money because it means that money must be studied in the concrete practices of which it is a part, where it plays varying roles and where it is mutually constituted with other, non-monetary practices. For instance, studying budgetary practices among members of evangelic churches in the US, Zaloom (2016) shows that when religious practitioners attribute religious meaning to the way in which they distribute their expenses, they turn US dollars into a means to connect with God. At the same time, proper budgeting becomes a necessary practice to live a religiously acceptable life. In these practices, people constitute together money and divinity in a way that makes them interdependent. In a different case, Fourcade (2011) has shown how compensation for oil-spilling pollution events can vary dramatically in different historical, political and institutional configurations. An aversion to produce a monetary valuation of nature in the case of the Amoco Cadiz oil-spilling led to a very low compensation in France, while the courts’ decision that the Exxon Valdez oil-spilling in natural reserves should be evaluated in monetary terms within the whole US territory led to a very high compensation. In both cases, the amounts paid depended on the different ways in which money and nature were mutually defined. Guyer (2004, 2016 has shown how, in everyday practice, people mobilize different repertoires of money, sometimes in the same exchange, and that these repertoires can be contradictory, disconnected and people can transform them and create them anew in concrete interactions. Maurer (2015) extended this analysis to digital payments, showing that there are a multiplicity of practices and meanings that must not be simplified, as some policies tend to do, into a dichotomy between the “poor” and the rest, with the former inevitable bound to become like the latter.

In this article, I address the regularities of monetary practice with the term “imaginaries”, considering as inseparable the regular forms of action with money and the meanings actors attribute this action. The term thus corresponds to what Guyer refers to as “repertoire”, but, as Castoriadis (1987 [1975]) highlighted, speaking of imaginaries allows for stressing how these regularities, although sometimes instituted, can be labile and open to creativity and change. Guyer stresses this aspect as well, speaking of the “performance” of monetary repertoires in a way that also echoes Butler’s (1990) analysis of the performance of gender. This pragmatist approach differs from the tendency of functionalist and idealist approaches to attribute one main meaning to money. In approaches that consider money as a function of exchange, usually derived from liberal theory and found in neoclassical economics, the functions of money are considered stable and homogeneous for all monetary relations. This approach is used in analyses of digital payments that consider them simply as a technical tool to multiply exchanges and make them faster and safer (see for instance World Bank Group, 2014). Idealist approaches, like that proposed by Simmel (1978 [1900]), consider, instead, that money is primarily a shared standard among participants to the exchange and, as such, it is both the result and motor of the constitution of a community of interdependence. This symbolic and unifying role of money has been stressed by studies that foreground the role of political authorities in the mutual constitution of society and monetary practices (Aglietta & Orléan, 2002). Although these approaches highlight important processes, by theoretical construction, they have difficulties integrating the multiplicity of meanings and practices stressed in pragmatist approaches. At the same time, the focus on multiplicity of meanings and practices needs to take into account the monetary production and distribution brought about by institutions. This paper proposes thus to use the insights of pragmatist approaches of money to ask questions about the monetary institutions of digital payments.

Institutionalist approaches have shown that, far from the stylized propositions of functionalist or idealist analyses of money, the institutions of production and distribution of money have complex rules that correspond to legal and professional standards that have developed over sometimes very long periods of time. In most jurisdictions around the world, money is mainly created by the banking system through credit, with an anchoring on the central bank. Banks thus tend to manage not just monetary creation, but also payments and the general social accounting system (Biondi, 2018). At the same time, the transmission of the central bank’s reference interest rates depends on a wide circulation of short-term debt instruments among financial and non-financial companies, giving the financial industry an “infrastructural” role in public policy (Braun, 2018; Ricks, 2018). We must analyze Big Tech’s digital payments and financial services within this setting. Pragmatist studies of monetary authorities and of the financial industry show that procedural and legal rules do not occur mechanically. Their efficacy results from their application by the employees working in these institutions every day. Studies in political economy, sociology and anthropology of the financial industry show the importance of the political, moral and technical imaginaries that the employees of these organizations mobilize to make sense of their own daily practice (see for instance Ortiz, 2021; Zaloom, 2006). These imaginaries do not simply reproduce stylized economic theories, but, on the contrary, closer to the practices described by Guyer (2004), they combine multiple, often fragmented and contradictory repertoires. Concerning monetary institutions, Langley (2015) studied the changes in central bank’s reactions to the unfolding crisis of 2007–08, showing how central bankers not only mobilized different economic theories in a short period of time but, also, they appealed to non-economic theories about emotions and beliefs of financial industry actors. Holmes (2013) studied how the Bank of England, besides mobilizing macroeconomic theories, uses sociological approaches to survey the expectations of economic actors around the country, including consumers and small and medium enterprises (SMEs). These studies show that the imaginaries mobilized by the people working in monetary institutions are multiple and play a central role in the way in which these institutions work. Besides, the efficacy of these institutions depends on how people outside of them appropriate their policies. As Guyer (2016) has shown for structural adjustment in Nigeria and Neiburg (2006) has shown for anti-inflationary policies in Brazil, outside these institutions, people understand monetary policies in a wide variety of ways.

Studying monetary institutions from a pragmatist perspective implies thus looking at the procedural rules within them and at the multiplicity of meanings and practices outside of them that contribute to sustain and transform the effects of these procedures. In this article, I use this approach with the limited aim of proposing exploratory questions. The transformations occurring with the expansion of digital payments managed by Big Tech are obviously too large to be addressed in one study, and they are also still unfolding. Here I only focus on the way in which Big Tech transform social hierarchies by the way they connect money to digital, non-monetary practices, and on their relation to the state and the banking system which, in China, is mainly state-owned. To do this, I will draw on secondary literature, mainly documents that present the activities of Big Tech, and on existing bibliography that allows to situate Big Tech in China today. I will also draw on some concrete examples to expose aspects of my argument, but the aim of the text is not to give an exhaustive picture of the situation, rather, it is to formulate questions that seem important for addressing how digital payments are transforming money and the way we can analyze it.

The next section explores how digital payments change the roles of money by connecting it with non-monetary relations. I show how digital payments are part of a very broad set of digital practices whose management is concentrated mainly in the hands of Alibaba and Tencent. This makes monetary and non-monetary digital practices interdependent. I highlight data on inequalities concerning digital practices, to raise questions about how digital payments contribute to the production of social hierarchies. The following section explores the institutional connection between Big Tech and the system of monetary production and distribution by the state and banks. I show how they are mutually dependent and, at the same time, they propose partly compatible and partly diverging imaginaries about the role of digital technologies and digital money for society. As I will explore, within the Chinese jurisdiction, these imaginaries concern especially the constitution of a national society. Based on this, I raise questions concerning the organization and legitimization of monetary institutions in the context of non-state-owned digital payment systems. In the conclusion, I address these questions from a global perspective, evoking points of comparison and differences between Big Tech in China and the GAFAM.

1 Digital Practices, Digital Payments and Social Hierarchies

In China,^[3] digital payments are mainly concentrated in two apps, Alipay and Wechat Pay, controlled respectively by Alibaba and Tencent. These companies also concentrate many other digital services, including e-commerce, social media and the apps developed by the central government to contain the Covid-19 pandemic. Due to this concentration within a small number of organizations, algorithms can be designed to combine information about digital payments with digital information about non-monetary practices, making both interdependent. This raises at least two types of questions. The first concerns the analytic definition of money. Observing the rise of digital technologies in the 1990s, Hart (2000) remarked that money serves as an inscription of social relations and is thereby constitutive of social identities, which are partly produced by the temporal accumulation of monetary transactions. He stressed how the proliferation of inscriptions about social interactions based on digital technologies reinforced this “memory” function of money as it was digitalized. This raises the question of what roles of money we highlight in the analysis of monetary practices: beyond the classic functions of money (means of payment, account, exchange and store of value) and the organization of money by the banking system, money as information plays new social roles even beyond monetary relations. Based on this, a second set of questions concerns the way in which monetary hierarchies are combined with digital hierarchies. Algorithms tend to reproduce social hierarchies by transforming social regularities into algorithmic rules. For instance, credit scoring tends to use available data about individuals’ past practices to produce a hierarchy in the access to credit. As many sociological studies show, this past practice can be the result of many forms of discrimination, for instance in terms of gender and race, which affect people’s capacity to access credit and pay it back. Credit scoring turns this difficulty, which results from social relations, into a factual basis to assess riskiness, which results in these people having lower credit scores. Thus, established forms of social discrimination that constitute current hierarchies in the access to credit are reproduced into a numerical scale, which is presented as the politically neutral result of algorithmic calculation, and is used to perpetuate and justify the exclusion of these people from the access to credit (Burrell & Fourcade, 2021; Fourcade, 2016). The result of the application of these rules then tends to be naturalized, veiling their reproductive role. These digital hierarchies depend on the unequal access to digital technologies and on the inequalities that exist in the activities that algorithms take into account. These hierarchies are thus combined with monetary hierarchies, for instance those established in terms of income and assets. In the context of widely spread digital payments, monetary hierarchies must therefore be thought together with non-monetary, digital hierarchies.

Digital payments in China have expanded rapidly in the last ten years. In 2003, Alibaba set up a system for users of its e-commerce platform. Tencent established Wechat in 2011 and Wechat Pay in 2014. These payment systems really expanded with the adoption of smartphones in the early 2010s and became widespread in the second half of the 2010s (for a historical account, see for instance Huang & Xun, 2021). They are used for both offline (for instance, in physical shops) and online transactions and their widespread use through smartphones makes them a very present form of digitalization in everyday life. The data they gather and their algorithms are fundamental components for the development of financial services and other digital services. This process is mainly organized by a small number of big companies, with Alibaba and Tencent occupying a major position, followed by companies like Baidu and Jingdong. The interactions between apps and algorithms are potentially very complex and remain obscure, even if companies are explicit about their existence (see for instance the joint report by Bain, AliResearch and Baidu, Li et al., 2021; see also Wang & Doan, 2018). The data these companies collect and manage concerns a wide variety of activities, even beyond monetary practices, and contributes to create multiple forms of interdependence among several hundred million people.

At the beginning of 2021, digital payment apps were used by some 850 million people in China. Two apps control 93% of the flow: Alipay, which belongs to Alibaba via its subsidiary Ant Financial, concentrates 55% of digital payments, while Wechat Pay, which belongs to Tencent, concentrates 38%. In turn, in 2019, these two apps concentrated 55% of non-cash payments, the rest concerning mainly debit cards and credit cards (see SCMP, 2021 for the data above). Alibaba and Tencent connect digital payments to financial services that are directly accessible in the same app. Payers can use short-term credits for consumption directly when they use the payment app. They can also access insurance contracts and investment funds. The four major technology companies in China, Alibaba, Tencent, Jingdong and Baidu all offer financial services in insurance, credit, asset management and payments (SCMP, 2021). Alibaba and Tencent have established licensed banks. But they also work as brokers for other banks, using the data collected in payments to establish risk profiles and risk scoring to channel their loans. Ant Financial thus reported at the end of 2020 that 39% of its income came from lending, with an outstanding credit balance of over 2 trillion CNY and a portfolio of loans for consumers and small and medium enterprises that surpassed that of any other bank (McMorrow & Liu, 2021). Alibaba also owns the biggest e-commerce platform in the territory, combining Tao Bao and T-Mall, which accounted together for 56% of e-commerce revenues in China in 2020 (SCMP, 2021). Loans to SMEs and consumers, backed by data on payments, have situated Tencent and Alibaba as major actors in this segment of the banking system, since banks, without access to these data, had so far the tendency to avoid this kind of credits. The brokerage role of Big Tech thus combines competition and collaboration between Big Tech and the financial industry.

These payment and financial services have developed together with other digital services and forms of interaction (Table 1). Alibaba is the major actor in e-commerce, being in competition with two other companies, Jingdong and Pinduoduo, which have also developed financial services. But Alibaba is also the first minority shareholder of Weibo, the leading blogging company, with 530 million users (Weibo Corporation, 2021). Tencent owns two social media apps, QQ, created in 1999 and Wechat, created in 2011, that have today respectively 530 and 1250 million active accounts (Tencent Holdings Limited, 2021). Tencent also holds a participation in Didi, the car hailing app, and in Meituan, the delivery app, that respectively concentrate 85% and 67% of transaction monetary value in their sectors (SCMP, 2021). Tencent is also the leading company in video game production in China, earning 54% of the sales of the sector in 2020, and one of the major actors in that sector worldwide (SCMP, 2021). Alipay and Wechat also include the mini-apps fundamental in the central government’s management of the Covid-19 pandemic. The two companies are also major actors in the sectors of digital education and health. They are also major investors in blockchain technologies, a sector where the leader is Baidu, which also owns the biggest search engine within the Chinese territory. Alibaba and Baidu are also entering the business of semi-conductor manufacturing (SCMP, 2021). Alongside Bilibili and Bytedance, Wechat and Weibo are major apps for video sharing, a sector with over 850 million users in 2020 (SCMP, 2021).

The description above allows for seeing different forms of interdependence between digital payments and other digital relations, such as those established with apps for video sharing, car hailing, blogging, deliveries or financial services (Citi GPS, 2018; Lee, 2018). Algorithms for each digital service or practice feed on the information gathered about all their users. Although the term “community of users” may signal too much homogeneity within these groups, for each app, algorithms make users interdependent on a massive scale. This creates social groups of interdependence, which may relate to specific demographic characteristics or consuming habits. At the same time, although the absolute numbers of users are high, within the Chinese territory in which these interdependences are established, these numbers point to the inclusion of a minority of the population into these digital relations. The process of “platformization” is quite uneven and fragmentary (De Kloet et al., 2019). Access to internet connection is available to 71% of the population. It is unevenly distributed among rural and urban areas, age groups, gender, professions and income. Only 470 million people use delivery services, 396 million use car-hailing apps, 324 million use online education services and 166 million use internet wealth management services (for all these numbers, see CINNIC, 2021). This is also visible in the concentration of most the most influential companies in Beijing, Shanghai and Shenzhen, with the exception of Alibaba, headquartered in Hangzhou (KPMG, 2021).

The data presented above shows that the expansion of digital payments and other digital forms of interaction that developed with them tend to reproduce existing forms of stratification and differentiation in terms of age, education level, location and income. At the same time, they also produce new social relations and hierarchies. We can see this in the case of financial services. With the development of digital payments, new populations have been integrated to the financial services produced by digital companies. As has been studied elsewhere, the expansion of credit has probably enmeshed in more rigid forms of indebtedness vulnerable populations that may now be more dependent on Big Tech and the banking sector with which Big Tech collaborate (see, for instance, the concentration of power by crowdfunding platforms, Lissowska, 2021). But, like Maurer (2015) showed for examples outside of China, this comes with new meanings and social relations produced by diverse users. MacDonald has shown how factory workers in China use the credit system of apps like Alipay to replace certain credit relations within their families and hence actively depersonalize them. At the same time, the re-personalize these apps, attributing for instance a charismatic role to Alibaba’s founder, Jack Ma, and opposing it to the banking system. They also differentiate payment apps by using them separately for different activities and types of payment (MacDonald, 2020; MacDonald & Li, 2020). The credit scoring app of Alipay explicitly claims that the credit score depends on the quality of financial practices of the users, but also on their social relations and social behavior. Users may then attempt to influence their score by changing their non-monetary behavior. In all these processes, factory workers manage to extricate themselves of the power relations that organize forms of debt related to kinship and friendship and become enmeshed in the power relations organized by Big Tech. In the process, they redefine their social identities involved in kinship and friendship and the meanings of money and credit. This is just one example of how monetary and non-monetary practices influence each other by the way people interact with algorithms that partly reproduce and partly transform social hierarchies.

The concentration of digital payments and other digital services and practices within a small group of companies allows for algorithmic interdependences between these practices. This is a feature of algorithms and digital technologies that is transforming the social roles of money and the social hierarchies that digital payments contribute to produce. Studying digital payments implies thus analyzing the concrete effects of algorithms in the connection between monetary and non-monetary practices, as well as the strategies and operations of the companies that control this particular infrastructure. As Maurer et al. (2013) highlighted, once money circulates through digital infrastructures, the organizations that control these infrastructures control, up to a certain point, money itself. The following section explores this issue, analyzing the relation between the Big Tech that control digital payments, the state and the financial industry.

2 Institutions and a Project of Society

This section addresses the place of Big Tech among monetary institutions and the legitimizing narratives that this institutional arrangement produces. As recalled in the introduction, worldwide, the current production and management of money tends to happen in an arrangement between states and banking systems. The increasing role of Big Tech in digital payments means that they concentrate central infrastructures for the existence of money (Maurer et al., 2013). This integrates their organizational concerns in the production and distribution of money. Helleiner (2003) has shown how the nationalization of money is a recent historical process that has never been totally achieved. Multiple monies circulate within national territories and not of all of them are national currencies. The recent production of non-state digital monies like Bitcoin, albeit limited in their scope, points to the technical possibility of a future proliferation of monies in this form. Facebook’s project to launch a global currency, Libra, in 2019, highlighted the technical possibility for the development of forms of money more directly controlled by private for-profit companies. But the central role of banking systems in the production and distribution of money means that even national money was never just a national project of the state. It has always also been a tool for profit-making by financial institutions, many of which operate in geographies that do not correspond to those of single states. In this section, I would like to address two sets of questions about digital payments in relation to these issues. One concerns the way in which Big Tech relates to the state and the state-owned financial industry in China, concerning the control of digital payments and the information they produce. Like elsewhere, in China, money has been part of a project to constitute a national society, in this case led by the government and the Chinese Communist Party (CCP). The government has also hailed the development of digital technologies as part of a project of national integration. The question raised here concerns the relation between Big Tech and this project. The second series of questions concerns the idea that Big Tech operate along capitalist logics of profit and accumulation, as highlighted in the work of Zuboff (2019), among others. From this point of view, the expansion of digital payments would be organized and justified as a business practice. This has also been studied for the way in which Big Tech has transformed legal forms to fit their accumulation of data against concerns for privacy (Cohen, 2019; Pistor, 2019). In conjunction, state and capitalistic logics could then be thought to contribute to the “societies of control” foreshadowed by Deleuze (1992), where tracking of practices is constantly expanded in order to orient the practices themselves in the interests of these organizations. In the previous section, I recalled the multiplicity of practices and social hierarchies, including forms of digital and monetary exclusion, that constitute digital payments. This implies that any “control” has the limitations of the technologies themselves and of the social hierarchies that include and exclude populations in various ways. But also, the analysis of the legitimizing narratives of digital payments shows that contradictory or disconnected imaginaries can contribute to these developments, so that the unity of the process itself must be questioned.

Since 2013, the Chinese central government has considered the digital economy a central component of the future Chinese economy and society. Over the last ten years, several government policies have supported this role with multiple aims (Gruin, 2019; Gruin & Knaack, 2019). The growth of Big Tech in China is in part due to either the ban or the tight government control imposed over the development of the GAFAM in the territory. While Google and Facebook have been totally excluded from the Internet within the territory, Amazon, Apple and Microsoft can operate by complying with rules concerning not only the content of information they circulate, but also their sectors of activity and the scope of their expansion. Besides, regulatory frameworks and supervision, and investment and business opportunities were geared towards helping the rise of a few major companies, granting them an oligopoly within which they would still need to compete with each other to survive (Lee, 2018; Wang, 2018). This combines three related aims. On the one hand, the “digital economy” as a sector of activity is proposed as the driver of future GDP growth, as the central government tries to render economic activity less dependent on exports and on infrastructure construction. At the same time, the digitalization of everyday life is part of an explicit political project to digitalize relations among citizens and between citizens and the state. This would combine the efficiency of fast and widely distributed communication with the limitations on corruption promised by the reduction of personal meddling in administrative procedures taken up by algorithmic treatment (State Information Center, CEIS Xinhua Indices and Ant Financial, 2019). On March 5, 2021, the Chinese Prime minister, Li Keqiang, thus expanded on the theme of building a “digital China” (Xinhua, 2021). Expansion of surveillance systems are presented as a form of social control that would contribute to the creation of a “harmonious society”. The project of the Social Credit System launched in 2014 hinted to a further social integration and social control through digital technologies. In concrete practice, that project has mainly remained at the level of blacklisting people and organizations with confirmed court sentences, but the imaginaries it mobilizes have been part of a broader and more concrete governmental project concerning digital technologies. Finally, digitalization has an explicit geopolitical component, not only for its role in the current arms race, but also because it is viewed as a central technology for the future of the whole world, and one in which the Chinese government wants Chinese companies to play a major role as they face the competition of the GAFAM.

The centrality of digital payments for the development of digitalization in everyday life within the whole territory gives Big Tech an important place in these governmental projects. Big Tech have explicitly presented themselves as contributing to the political project of poverty reduction and GDP growth by enhancing financial integration and providing platforms for the development of economic activity, for instance through e-commerce and social media. They are also the sites of technological exploration that is crucial for the digitalization of relations among citizens and between citizens and the state. Alibaba and Tencent manage several forms of legally compulsory identification. Wechat accounts can be used in many instances as proof of identification, since they are directly connected to a person’s ID. The development of the apps to manage the Covid-19 pandemic is an exceptional example. These apps are used to track a person’s movements and contain real-time information about the person’s PCR results and vaccination status. Depending on the areas of the country and the situation of the pandemic, the app’s signaling that the person is risk-free (a “green” code) is necessary to access official buildings, public transport and many other public buildings. The app also indicates to a person, and hence to their social environment, that they are a source of risk and must quarantine themselves. The personal information contained in the app is produced and managed by health authorities, but the infrastructure is contained in the apps of Alipay and Wechat, so that public health and public policy are inextricably connected to these companies. Finally, part of the research that will be crucial for governmental geopolitical projects for digitalization occurs within these Big Tech, concerning blockchain, artificial intelligence and hardware. Directly and indirectly, digital payments thus play a fundamental role in these developments.

In the years 2020 and 2021, central government policies and regulatory actions have reinforced state control over the activities of Big Tech. In this process, financial services and digital payments play again a fundamental role. New regulations since the end of 2020 have tended to integrate the financial services of digital companies within the existing regulatory framework applied to the rest of the financial industry, following a previous shutting-down of the P2P lending sector that operated during the 2010s. This may reduce some of the profit margins for these companies but does not fundamentally threaten their activities (Chen et al., 2021). At the same time, new regulations and regulatory actions are launched by state authorities concerning the privacy of users’ data and limitations to monopoly practices by the Big Tech (SCMP, 2021). Current negotiations and conflicts between the Big Tech and the PBoC concern sharing data about payments and financial services, in order to constitute a national database that would be used for credit scoring and financial regulation by the whole financial system. This would diminish the current advantage of Big Tech to offer financial services to the segments of the population that tended to be excluded from the banking system. Since early 2021, the PBoC has launched the use of a “digital renminbi”. This consists mainly in a system of digital payment managed by the Big Tech and the main state-owned banks that looks very similar to existing digital payment apps. A major difference is that the PBoC will have access to much more detailed information about these payments, in contrast to what happens now with Alipay and Wechat Pay (Ortiz, 2021).

Official government policy considers that economic sectors that are deemed strategic must remain under the control of the state. Big Tech thus constitute a particular organizational setting, not officially state-owned, but fundamental for strategic policies. In this institutional space, these companies can propose meanings for their actions that are connected to consumption and marketing instead of to social or political aims. At the same time, they must comply with the social and political roles enunciated in governmental policy. The relation between the government and Big Tech can therefore not be analyzed with a strict distinction between collaboration, interdependence and conflict (Wang, 2018, 2020). In some respects, Big Tech companies operate like parts of state policy. In other aspects, they operate as private companies in search for profit. In this setting, legitimizing narratives and concrete practices can be produced by both the state and these companies in converging, overlapping or diverging ways.

We can see these differences by comparing two examples. In January 2021, the CCP published a book composed of excerpts of discourses pronounced by Xi Jinping between 2013 and 2020 concerning digital networks (Xi, 2021). The extracts are organized in nine sections, including topics like the centrality of digital networks for the development of the country, the importance of the ideological struggle in digital networks and the constitution of a powerful country in the domain of networks, a theme used for the title of the book. The introduction to the book highlights that some of these discourses are made public for the first time, and the book itself operates as a form of political declaration. The book takes up the topic of building a “digital China”, the importance of using digital technologies to unify the country, and the role of digital technologies in a global competition where they play an increasingly central role. The discourses thus situate national sovereignty and the role of the state and the CCP at the center of the project of developing digital technologies, partly in a confrontation with “the West”, and partly as a project to unify humanity through communication and shared rules, including those of the United Nations. Two years earlier, in 2019, Alibaba published an online report in English (AliResearch, 2019), where it stated its view of the role digital technologies would play in social relations. The report does not mention national unity and stresses the idea that digital technologies connect people by focusing on the granularity of their individual actions, thereby connecting individuals through their discrete behavior in a way that makes this behavior predictable. The geography of these social relations corresponds to that of the expansion of digital technologies themselves, and the management of the data and the algorithms are left to the experts who can produce them, without any role for the state or the CCP. This narrative echoes quite directly that produced by practitioners in the digital sector outside of China (see, for instance, Domingos, 2015). Alibaba’s document belongs to a wider variety of discourses produced by the company and cannot be taken as the company’s unique standpoint. But its publication, standing even after the regulatory upheavals at the end of 2020, shows that the company can sustain this kind of imaginaries. The most recent policy changes since 2021, not addressed in this article, must thus be analyzed in the light of the relations established between Big Tech and the government so far.

The imaginaries proposed in the two documents published by the CCP and Alibaba are quite distinct, concerning which institutions should control algorithms and for which aims. At the same time, as I have shown above, these organizations cannot be considered as totally separate and the role of digital payments is central in their relation. These processes can therefore not be subsumed under a single logic, for instance that of neoliberalism or of state sovereignty. Following the pragmatist approach of money proposed at the beginning of this paper, we can see how there is a multiplicity of imaginaries at play even within monetary institutions that are intimately related.

3 Conclusion

This article proposed to look at major features of the development of digital payments in China to explore analytic questions raised by the increasing role of Big Tech in the production and circulation of money. The analysis highlights that monetary hierarchies must be studied together with digital hierarchies, as they influence each other through algorithmic treatment of data gathered from a variety of monetary and non-monetary practices. This, in turn, raises theoretical questions about the definition of money as an object of analysis. Beyond functionalist and idealist definitions of money, a pragmatist approach allows for seeing how the social roles of money are multiple and variable. Digital payments give new roles to money that must be studied without simplifying them into a fixed series of functions. The role of monetary institutions is central in this process. The article studies how, in China, Big Tech play a central role in the production and distribution of money, so that they must be considered part of monetary institutions, together with the state and the banking system. Yet, Big Tech have specific business orientations and produce particular imaginaries about the legitimacy of their own activities that do not totally correspond to those of governmental policy. They occupy a particular institutional place, as non-state-owned for-profit companies that play a central role in public policy. The analysis proposed here does not fully address the latest events since the governmental policy changes in the 2020s. In particular, between December 2022 and January 2023, the Covid-tracing systems have been almost dismantled and the government announced officially the state’s taking a 1% minority shareholding position in Tencent and Ant Financial, among other Big Tech. It is of course too early to know how this will change the relation between the Big Tech and the government. The analytic questions raised in this article allow for addressing this kinds of changes, studying the role of Big Tech in the production and distribution of money by staying attentive to their complex relations of interdependence, cooperation and conflict with the state and the financial sector.

It is clear that many features of the place of Alibaba and Tencent in China make their example impossible to replicate elsewhere. These companies have an intrinsic relation with the state since their inception. They operate as an oligopoly with a few other companies within the Chinese territory, where around 1,4 billion people live, so that the data that they can gather is rich and diverse, but also homogenized by the use of the same language, Chinese Mandarin. The algorithms these companies develop are therefore hard to replicate in other settings, for instance in Europe or the US. The relation between these companies and the Chinese state also differs from the relation of the GAFAM with the US state, even if in both cases these companies receive strong state support. The same can be said of their relations with the banking sector and the financial sector more generally. Alibaba and Tencent operate mainly within the territory of a single state, the People’s Republic of China, where the financial sector is overwhelmingly state-owned. The support of the Chinese state for these companies has so far mainly concerned their development within the Chinese territory, although these companies are now expanding rapidly abroad. In the US, the GAFAM have also grown with strong state support and this has helped them become the world’s major companies in the sector. As a result, they operate globally, with billions of users using different languages and living in different jurisdictions, and they cooperate and compete with a financial sector that is owned by different institutions operating in various global geographies. In spite of these differences, the development of digital payments by the GAFAM and other companies operating in the digital sector outside of China still poses similar analytic questions about the combination of monetary and digital hierarchies and about the organizational concerns and legitimizing narratives with which these institutions operate.

Digital payments based on cellphones and smartphones are expanding globally. They are controlled by a wide variety of organizations, many of them non-state-owned, such as Big Tech and telecommunication companies. The current development of central bank digital currencies and of non-state-backed digital currencies adds to this diversity. The organizational settings and the political imaginaries of these forms of production and distribution of money vary widely depending on the institutions concerned. At the same time, these developments imply the increasing role of digital expertise in the production and distribution of money, including the role of algorithms and the ways in which their distributive effects are justified and contested. Although this article has focused on processes happening within China, the development of Alipay and Wechat Pay must therefore also be analyzed as part of these global transformations.