Chinese efforts to regulate its tech giants

Written by: Zuo Yuning (21-A1)

Designed by: Katelyn Joshy (21-U1)

China is known for its regulations on the Internet, especially with the ‘Great Firewall of China’ enforcing strict prohibition of foreign Internet service providers such as Google, Twitter and Facebook.

Relatively, it is much more lenient with its domestic counterparts, allowing them relative freedom in operation.

Recently, however, the Chinese government has hosted a meeting with heads of Chinese tech giants, including Alibaba, Tencent and Bytedance, the owner of Tik-tok.

This came after a speech by Jack Ma, founder of Alibaba, in which he criticised China’s strict financial regulations for creating a counterproductive business environment.

Coincidentally, Chinese moves mirror those carried out by the European Union and the United States, in their efforts to regulate tech giants. 

The governments do seem to share the same motive: to curtail monopolistic behaviours by dominant corporations to ensure fair competition in the market.

Nevertheless, the purity of the Chinese government’s intention should and have been questioned. Some are worried that it is a continuation of a worrying trend in China where all private firms are facing increasing government scrutiny and regulations, while others see this event as an effort to ensure that it has firm control over its citizens’ online activities and data.

China’s Tech Companies: How Have They Become?

Before we get into the debate, though, let us understand the brief but turbulent history of China’s tech industry and the Chinese internet.

China was behind the world in terms of information technology, since its borders were sealed to foreign ideas and foreign products. Most Chinese didn’t know about computers until the mid-1990s, and most did not own them until the mid-2000s. Mobile phones came even later, which means the giant technological companies that everybody knows about nowadays have really only flourished roughly for a decade.

Much like in Western countries, the rise of the gigantic digital industry has been drastic. In China, the journey of Jack Ma’s Alibaba is very similar to many other companies in the industry – in terms of their rise, but also in terms of their troubles with the central government.

Mr Ma started small. On 28 June 1999, he founded with 17 friends in his Hangzhou apartment (Alibaba Group, 2020). His business didn’t take off immediately, for it was three years later that finally made a profit (Business Insider, 2017). He was lucky, as the founding of his company coincided with the Internet boom in China in early 2000s (Yang, 2018).

At that time, it seemed like the Internet would integrate China into the global flow of information, but China soon decided that ‘enough is enough’. Regulations on digital firms started with control over data flow (Qiu, 2000), and then the project called ‘the Great Firewall of China’ was initiated in 1998 (Shen, 2020). By 2012, most major foreign digital services have been banned on China’s internet (Xu & Albert, 2017).

Censorship has certainly been horrible for Western firms and for free speech in China, but it proved to be a tremendous fortune for China’s domestic digital corporations such as Alibaba. With their foreign rivals banned or restricted they faced much less competition, they gained a very large market share and hence their profits rose (Desjardins, 2019). 

Nevertheless, the digital industry, just like other private firms, has always faced strict regulations from entry barriers to financial regulations (Livingston, 2020), and some of them are getting even stricter in recent years (Wei, 2020).

That is part of what Mr Ma talked about in his speech, and apparently the government was somewhat upset with that.

But that antagonism between the state and technology firms is actually very new and unexpected.

In October last year, columnists were making predictions like ‘just as the US starts looking to rein in, or even break up, big technology firms’, referring to the Congress hearings on that issue in July that year (Romm, 2020), ‘China is going in the opposite direction [as] we should expect to see more money, more policy favouritism, and more attention from party cadres aimed at ensuring the establishment of big successful chip and software firms’ (Culpan, 2020).

Well, the truth is the government has indeed been very favourable towards its tech firms, for the latter are often providers of key technologies, services, innovation and lots of jobs in China as much as in other parts of the world (Cavallo, 2016).

However, that attitude seems to have changed, as China has begun tightening regulations on those exact companies (Wei, 2021).

There are many views on why this happened, and on whether it is justified. Let’s go through them.

Regulations and Monopoly: The Economic Analysis

One argument coincides with the official narrative: China cannot let its tech companies become too-big-to-fail.

This understanding chiefly comes from the past experiences of Western nations, when they suffered the impact of having an entire industry dominated by a few big firms.

Monopoly isn’t a modern problem; the problem has plagued nations since the birth of capitalism.

In the history of the United States, famous examples of monopoly firms include Andrew Carnegie’s Steel Company, John D. Rockefeller’s Standard Oil Company and the American Tobacco Company (The Investopedia Team, 2021).

There’s a less extreme case, though. A market may not be dominated by one firm, but by a few firms. Nonetheless, the economic problems they cause are very similar: over-pricing and underproduction of goods and services (Thoma, 2014), and disincentive to innovate (Marcos, 2018).

As a case study, let us look at the US healthcare market. Undoubtedly that system has delivered too little for too much, for even though it spends the most portion of its GDP on healthcare among all Western industrialised nations (Kamal et al., 2021), it has one of the worst health outcomes, shown especially by how it has the lowest life expectancy in that same group of countries (The Commonwealth Fund, 2020).

The reason is probably market dominance. You see, more and more profit hospitals are applying tactics such as horizontal consolidation, where hospitals choose to merge up, and vertical consolidation, where they hire more physicians than before, to increase their market share (Kocher, 2021).

The insurance industry also suffers a similar problem. In 2019, the top five US health insurance companies own a whopping 45.6% of total market share (Statista Research Department, 2020). In some states and local areas, firms can enjoy monopoly or near-monopoly, and this situation is getting worse in recent years (Dafny et al., 2012).

Market dominance is prevalent in the pharmaceutical industry as well. With government regulations on drug prices virtually non-existent, big drug firms have tremendous power to fix prices to maximise their profits (Hawley, 2021).

All those factors combined, and you have a country where citizens pay the most amounts for a healthcare system that doesn’t exactly work out the best.

Allowing too few firms to dominate the market is to blame. No government should ever trust the firms so much that it allows them to stifle competition and reap profits for themselves.

Some may say that healthcare and the Internet are two systems that cannot be compared to one another, that while the healthcare market may need to be regulated because it is a service crucial to public well-being, the digital, high-tech industry should not be disturbed by the government’s heavy hand.

I disagree with them. I think market dominance is an issue common to many markets, and since it frequently produces undesirable results for the people and for the government, it should be avoided as much as possible. 

Besides, to say that government intervention is necessary in some instances is not to deny all the good work the market has done. We just need to look around us to understand the fortunes of capitalism. 

However, we must not forget that competition is the most important principle that keeps the free market working. If actions by the government can encourage competition, they should be welcomed.

Some may also argue that the so-called ‘undesirable market outcome’ that market dominance can produce may not be significant enough in every instance. The Chinese high-tech industry, for instance, has provided fairly efficient and affordable services (China Academy of Information and Communication Technology, 2020).

To that point, I may need to concede that currently market dominance does not seem to have affected the market outcome, although I think that adverse effects are still very possible in the future. 

However, there is another factor we have yet to consider. When a few firms become too powerful, whatever that happens to them can have tremendous influence over government behaviour because the economic fortunes of individual big firms simply matter too much to the economic performance of a modern nation (Cooch, 2012). That is, dominant firms can become too big to fail. 

Again, let us take a look at the United States. The 2008 financial crisis is the perfect example. After the bubble burst caused a recession in the late 1990s, the Federal Reserve decreased the federal funds rate in an attempt to boost the economy by encouraging spending and investment (Seabury, 2021).

This prompted many Americans to take huge loans to purchase houses, and many of them even borrow way beyond their ability to repay, in what is termed ‘subprime lending’ (McArthur & Edelman, 2017). Wall Street hedge funds engaged in lots of that, disregarding the significant risk of low-credit loans (Denning, 2011).

In early 2000s, however, the fed interest rates began to rise, hitting many with payments they cannot repay (Amadeo, 2020). What’s worse, as supply started to keep up with demand, housing prices began to fall in 2006 (Barker, 2009). This wiped the wealth of many and forced them into debts, as they struggled to pay back the mortgages.

That prompted a banking crisis in 2007, and then, when Lehman Brothers filed for bankruptcy in 2008, the entire global economy was sent down the spiral of recession.

Seeing that the financial system was on the brink of collapse, the newly elected President Obama offered a massive bailout of 700 billion dollars to Wall Street firms (Congressional Research Service, 2020). 

Initially that act was credited with ‘stablising the economy’ and ‘preventing another Great Depression’ (Clark, 2010), referring to the catastrophic global recession from 1929 to early 1930s. Retrospectively, though, more commentators start to say that the bailout was a ‘flawed design’ (National Public Radio, 2008), ‘unnecessary for economic recovery’ (Baker, 2018), and ‘benefited the rich’ (Eisinger, 2020).

The problem doesn’t end there. Wall Street firms are responsible for causing the crisis with their reckless lending behaviour, yet they are the first ones to get massive help from the government. There seems to be a mismatch, right?

Then, why did that even happen, given that bailouts might not have worked and are morally unsound? Answer: law-makers were scared. They were scared that the failure of the few Wall Street firms would bring down the entire economy, since they are simply too powerful and too entrenched in the working of the financial system (Mukunda, 2019). 

Therefore, even when bailouts are not the best economically and morally, law-makers will rush to the aid of firms that are too big to fail.

Market dominance is to blame. If there were more companies in the financial market and the leading companies had a smaller market share, bailouts that the economy didn’t need might not have been issued because in that case, the failure of a few firms would not have been such a horror to law-makers (Barr, 2017).

If a government doesn’t want its economy to be too dependent on the fortunes of a few companies, it needs to prevent market dominance.

China’s digital industry has typically been led by a few big firms (Belton, 2019). Looks familiar?

Thus, the Chinese government should go ahead and rein in on its tech giants, if the purpose is to curb the rise of dominating firms.

At least, as long as it is indeed doing what it says.

Privacy and Transparency: The Social and Political Consideration

The trouble with this move by the Chinese government, however, is precisely that people don’t know whether its aim is really just to curb dominating firms.

Many like to compare this to the US congress hearing – and indeed I have also made that comparison at the start of this article, just so that you will see the relevance of this issue – but the two are actually slightly different. While the US hearings are aired publicly and held by elected officials, the Chinese meetings were secretive and done by government officials whom we know little about.

That slight difference matters a lot to how the message should be perceived. It is much easier to trust a hearing that can be seen by everybody than to believe what a government spokesperson says it’s about.

Well, this issue about trust is a question few residents of mainland China will ask, for the overwhelming majority of those I know are loyal and very trustful of the government.

But that doesn’t mean we shouldn’t doubt and question China’s intent; we can never trust a government with a record of human rights violation and abuses (Edwards, 2020).

The possession of data has been a contentious issue in the Western world especially since the Snowden incident in 2013, and similarly it should be a concern for the Chinese people.

The Chinese government already has extensive access to the data owned by many private firms (Wang, 2017), and the fear is that by imposing even more regulations on tech giants, infringement on data and privacy rights will go from bad to worse.

This isn’t an empty fear, The Chinese government did take several actions to gain tighter control over tech giants’ databases (Leise, 2021).

Also, for a country that famously bans numerous foreign websites, it seems plausible that China is regulating the providers of digital services only because it has grown wary of allowing private firms to run the Internet. After all, it can get a lot harder to censor information regarding the Tiananmen Square incident of 1989 or the mass internment of Xinjiang Uyghers if private firms, rather than the government, power the search engines. 

Although the government already controls all the internet access routes (Herold, 2012), it has recently targeted Virtual Private Network (VPN) tools to circumvent the ‘Great Firewall’ and access foreign websites (Reuters, 2018). That indeed reveals deep anxiety about losing its control over the Internet.

If it cannot tolerate individuals surfing Google and Youtube, it certainly cannot tolerate a powerful industry whose service provision it isn’t fully confident that it can control.

Nevertheless, some may say to me that ‘hey Yuning, don’t be so pessimistic. Although there is a lot we don’t know about the Chinese government, we do know it has lots of laws that protect its citizens’ data and privacy, right?’

Well, you know what, they are right. The country does have laws and even clauses of the Constitution that protect those rights, with some of them coming out very recently (National Law Review, 2021). 

However, that works out better on paper than in reality. I just wish to point out that with such an opaque government that China has, nobody can truly be sure that the laws have been followed by law enforcement and state organs. If a liberal democracy like the United States, with all its watchdog organisations and institutional checks and balances, can have problem handling citizens’ private data like Mr. Snowden revealed, we should put even less trust in a one-party dictatorship.

I’m not making random assertions that China isn’t trustworthy; some of its actions in recent years seem to suggest that it really doesn’t want the public to know too much about what’s happening within its borders.

In February this year, for instance, the BBC reported that when the WHO went to China to investigate the origins of the coronavirus, it ‘requested raw patient data from early data’, which was ‘standard practice’, but only ‘received a summary’ from the Chinese government (BBC, 2021). 

If someone lies to you, will you trust him any longer?

Further back in time, the imposition of the National Security law is strong evidence of the unreliability of the Chinese government. When the United Kingdom handed Hong Kong back to China, the Chinese government promised to govern the land under a ‘One Country, Two Systems’ principle, which says that China will allow Hong Kong to remain a democracy with all its rights and rights unaffected, for another fifty years (Constitutional and Mainland Affairs Bureau, 2007).

However, in June last year, after a whole year of protests, China imposed a new National Security Law which targets a wide range of vaguely defined crimes, such as secession, subversion, terrorism and collusion with foreign entities (Tsoi & Lam, 2020). To most observers in the West, this has broken the ‘One Country, Two Systems’, for now China is directly interfering with Hong Kong’s judicial system (Rogers, 2020).

If someone breaks a promise he made with you, will you take what he says as truth anymore?

Although those incidents are different from the event we are discussing here, they do show that as we evaluate the action of the Chinese government now, we must not forget its horrible record at telling us what really is happening.

Conclusion: A Mess

As much as I hope to provide a definitive judgement on whether China is justified in doing what it’s doing, I cannot, unfortunately. Curbing the rise of dominating firms is a need, but as long as we have a government that lacks all the transparency needed for credibility, we can never take what it says as the truth.

China is shooting itself in its own foot by being so opaque about everything. It’s not just the regulations on tech giants that has caused global concern. Hong Kong, the origins of Covid-19 and the events in Xinjiang are just some of the things that have made relations between Beijing and the outside world tense, to say the least.

If China really wishes to earn the trust of the world on all those issues, it must reform its political structure. Democratisation is not necessary – though it will likely not wish to lose its grip on the state – but at least it should make its governance more accessible to outside scrutiny. That won’t solve all the problems, but at least that will help.


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Kaleidoscope: slices of life – The Gatekeeper

Written by: Katelyn Joshy (21-U1), Nigel Ng (21-A3)

That fateful night… 

I lifted my gaze and focused it on the hideous figure that stood inside the mirror- Thick overgrown, ebony black hair covered its raven black eyes. Its crimson red lips parted to reveal a row of gnarly teeth. ‘Why must you be such a freak?’ I glowered. 

Growing up, the world taught me a cruel lesson, ‘Fit in or don’t.’- I was, unfortunately, part of the reject pile from day one. I was born on 13th November 1997, a Friday, in the dead of night amidst a raging storm. I came into this world, red-faced and bawling at the most ungodly hour- 3:00 A.M. Yet, the peculiarities of my existence were only just being discovered. It quickly became clear to all in the delivery room that night this was no ordinary child. As the nurses swaddled me in the washcloth, they couldn’t help noticing the stark contrast between my mother and me. There wasn’t a hint of Mum’s traits in me- Her blonde hair and aqua blue eyes never translated to her child. 

Needless to say, my childhood was abnormal. There were so many strange phenomena I experienced throughout my early years that I could never quite reason out. It started with small things like the allure of the darkness, then it quickly escalated into something more sinister. I started hearing voices and seeing people walking that aren’t there. Anything I touched seemed to die shortly after, from the flowers in the garden to the neighbour’s dog. Yet, the most bizarre of all is the recurring nightmares I have every night:

In a world bathed in darkness, a powerful man sits on a throne of skulls. This man is tall, with stately features. He has unruly Vantablack hair and a menacing gaze, clad in a sweeping black rob. His world is loyally protected by his pet, a three-headed dog-like creature. Then a thunderous sound erupts as a bolt of lightning flashes- suddenly, the man is no more. All hell breaks loose as spirits, demons and many more subhuman entities escape the dark realm to reach Earth. The world is in an apocalyptic state as shadow spirits roam the Earth, searching for human victims. Humans become possessed at the sight of the entities, and mass suicides occur…

I remember vividly the first time I had this vision, and since then, I slept with a dreamcatcher over my bed, but the nightmares never left me- even to this day. 

The incident left me traumatised, and I was never the same again. Then, it became clear to me ‘different’ wasn’t celebrated in this world; it was something outcasted, which my family became. At times, it felt so isolating- just me and my Mum against the rest of the world, but there was strength in the knowledge that we were together. 

“You’re special, son. I mean it.”, “One day, you’ll find your place in this world and realise the destiny you were born for.”, Mum once told me. At the time, I thought Mum was just saying to make me feel better. Yet, it was really the beginning of my journey to manifesting my fate. 

That fateful night…

“Zach! Time for bed!” Mum hollered from the kitchen downstairs. I instantly spun on my heel, tearing my gaze from my reflection in the mirror. Flipping the light switch, I raced to my bed, diving under the covers. Fatigue soon took over me, I fell into a deep sleep.   

In a world bathed in darkness, a powerful man sits on a throne of skulls. This man is tall, with stately features. He has unruly Vantablack hair and a menacing gaze, clad in a sweeping black rob. His world is loyally protected by his pet, a three-headed dog-like creature. Then a thunderous sound erupts as a bolt of lightning flashes- “ZACHARIUS!”, the last word that escapes the man’s lips before he is no more.

A searing agony shot through my body, jolting me awake. “AAHHHH!” I cried like a banshee. Then, a wave of blistering heat wept over my body, singeing my skin. In the struggle, I fell off the bed and saw it; Fern-like patterns of blue-black cutaneous marks sprawled across my arm. 

“…WH..WHAT?!!”, my gaze was fixed on the horrifying sight. A flurry of thoughts ambushed my mind.


Suddenly, the world purpled down into darkness, and the ground beneath my feet trembled with rage. The tremors grew in intensity, building up rapidly to a crescendo before the land was ripped into two. Then, shadowy figures started creeping out. I felt a dull ache as the feeling of déjà vu descended upon me. ‘THIS ISN’T BE HAPPENING! THIS ISN’T BE HAPPENING!!’, my mind screamed. Suddenly, a black void materialised before my very eyes, and an unseen force shoved me into it. I let out an ear-piercing shriek as I fell through what seemed like a dark, bottomless pit. 

Suddenly, the unseen force overpowered me and gently lowered me to the ground. I awoke in a world bathed in darkness. It was the place I saw in my nightmares. “WHERE AM I? WHY DID YOU BRING ME HERE!” I yelled aimlessly at the darkness. A moment of silence ensued before an unseen voice whispered, “Let me show you.” Suddenly, a pair of hands reached out from behind me and covered my eyes- I started seeing visions. 

The powerful man in black robes affectionately strokes the pregnant belly of a woman- his wife. His family disagrees with the union; the man fights furiously with his older brother clad in white robes. The powerful man’s wife is banished from his world, sent back to live amongst the mortals on Earth. Her face was revealed as she turned back to look at him the last time- MOTHER. 

“NO!” I screamed. “IT CAN’T BE!” I struggled to free myself from the unseen hands. 

“It is. You know it yourself. The childhood you had, your life experiences were by no means a misfortune. You are no ordinary boy; you are the son of the Divine. A half-blood prince, gifted with the abilities possessed by your late father”, the voice boomed.

“THIS IS NOT REAL!”, my hands flew to cover my ears. I shut my eyes tight. 

‘What about now?’, the unseen voice whispered in my head.

My eyes flew open in horror, ‘HOW?’ 

‘This is real, Zacharius. Believe it.’

“What do you want from me?” I croaked.

“It is not what I want from you. It is what your father would have wanted from you.”

“My father..”, my thoughts lingered on the mention of my father- the biggest enigma of my life. 

“Tell me what you know.”

“Very well. The man in your dreams is your father- you are the son of Hades, God of the Underworld. By loving your mother, the King of the Underworld went against the rules of Olympus- Loving a mortal. Their love was forbidden, and Zeus, your uncle, banished your mother to Earth. When Zeus found out about your existence, he was ready to end your life. Your father tried to stop him, but nothing stands in Zeus’ path.” the unseen voice echoed once again. 

A stubborn lump formed in your throat, “So he killed him”, my voice trembled with silent rage. 

“Zeus couldn’t afford a half-blood succeeding a God. It would disrupt the order of our universe- The Gods above and mortals beneath them, no exceptions. The sanctity of Olympus was at stake.”

A long, painful silence ensued as I tried to let reality sink in. A flurry of emotions plagued me, choking up my throat as I forced the words out; “The pain…I felt when I saw…when I saw the visions… of his death….”

 “A part of Hades resides in you; when Zeus’ bolt struck him, you felt it too. A part of you died that day.”

Those words set me ablaze, ‘A part I will never get back.’

“Those dreams you had since childhood are not nightmares- Like your abilities, they are no coincidence. They are visions of the prophecy you are to fulfil when the time is right. That is your fate. From birth, you were destined to avenge the death of Hades and bring salvation to mankind by taking your father’s place as Gatekeeper to the Underworld.”

“That time is now…” the rage that seethed within me built up to a fever pitch.

“I am ready for Zues”, every syllable dripped with contempt. 

“Not so fast Zacharius, battling Zeus is not a simple task. Drink the ambrosia from this urn; it will give you the strength to fight Zeus- God to God.” 

I could vaguely make out the silhouette of an urn by my side. Grabbing it, I brought it up to my lips, hastily wrestling the lid off. I titled the contents of the urn into my mouth and swallowed it in one gulp.

My body started morphing, “AAAHHH!”. My bones stretched as I grew to a colossal height, towering over the lands. My wounds healed, the Fern-like scars gone. My palms glowed an ominous grey as my pupils enlarged to fill the whites of my eyeballs. 

‘Are you ready to feel the wrath of The Gatekeeper?’