Chinese government meddling on the Web, including censorship on the mammoth WeChat social network, is boosting anxiety among game developers and smaller companies about their chances of survival. At the same time, companies in the West are sniffing opportunities to help China develop its surveillance system. 

Mobile game developers were forced to endure a months-long delay in approvals from officials in Beijing, which caused a 41% drop in sales to the country’s largest publicly traded video game companies in the first three quarters of 2018, according to Marketplace. 

Some 400 companies closed shop during the stoppage, which ended earlier this year when the government restarted the game-approval process.

When it comes to Internet censorship, the government in Beijing counts on Internet platforms such as WeChat, owned by the Chinese Internet giant Tencent, and news aggregator Jinri Toutiao to police themselves or face consequences. Foreign investors have poured billions in the Chinese tech sector in recent years, so any improvements in their financial fortunes there will benefit them. 

According to a recent report from the University of Toronto’s Citizen Lab, WeChat uses “realtime, automatic censorship of chat images based on text contained in images and on an image’s visual similarity to those on a blacklist.”

City Lab analyzed 220 censored images in its report, roughly 75 of which were related to the Chinese government.  Some were news reports from state-controlled media organizations which already are subject to government censorship.

“These include not only images critical of the government such as sarcastic cartoons but also neutral representations of government policy and photos of government leaders and party cadres,” according to the report.

Not surprisingly, WeChat predominantly targets political content, especially topics that would put the Beijing government in an unflattering light, including the Cultural Revolution and the 1989 Tiananmen Square Crackdown. 

The study also found censored images related to the arrest of Huawei’s CFO Meng Wanzhou in Canada at the request of U.S. authorities, the Sino-U.S. Trade War, and various scandals involving high-ranking officials. Interestingly, WeChat also flagged stories about the 2018 U.S. midterm elections.

According to leaked directives cited by Citizen Lab, Chinese regulators banned live-streaming and live updates of the U.S. midterms. They feared that if Chinese citizens saw accounts of the U.S. elections, they might expect that their country would one day do the same thing. Though China is a de facto one-party state, other parties are allowed nominal representation. 

“While we might expect Chinese censors to be sensitive to domestic criticism, this reminds us that even the reference to an outside alternate form of governance may also be sensitive,” the report says.

According to the Nikkei Asian Review, news aggregator Toutiao, which is valued at more than $1 billion in the private market, announced last year it planned to expand its self-censorship team to 10,000 from 6,000.Toutiao CEO Zhang Yiming was forced by regulators to issue and public apology and the company was forced to shut down for “sharing content deemed to glorify racy or socially inappropriate behavior,” the Financial Times said. 

China is an important market for U.S. social media companies, including Facebook and Twitter, even though they are officially “banned” by the world’s most-populous country. Many users can avoid the government’s technical blockade of the sites through the use of Virtual Private Networks.

U.S. companies are also playing a role helping China’s actions. According to the Intercept, an organization backed by U.S. tech giants such as IBM and Google are working with the Chinese company Steptian, which is developing systems to help the authoritarian government conduct mass surveillance of its citizens.

Gaming companies such as Riot Games, based in the U.S. and majority owned by Tencent, are also acquiescing to Chinese demands to permit surveillance, according to the Los Angeles Times.

U.S. social networks may be getting around the Chinese firewalls. Facebook, for instance, generated between $5 billion and $7 billion from Chinese advertisers trying to reach customers in the U.S. and other markets in fiscal 2018, roughly 10 percent of its overall revenue of $55 billion, according to Pivotal tech analyst Brian Weiser.   

Twitter is eager to expand in China. Earlier this year, it suspended the accounts of activists ahead of the anniversary of the Tiananmen Square massacre. Twitter later apologized.

Twitter users in China are facing a crackdown. According to the New York Times, the so-called Internet police have detained Twitter users and have forced them to delete their Tweets.