The World Expo in Shanghai, which involved massive mind-boggling construction projects and kicked off over the weekend with a grand fireworks display, might remind some of the 2008 Beijing Olympics. But that's about where the comparison ends.
The Olympics was an event that genuinely captured the public imagination in China. In Beijing, locals complained about the traffic hassles and construction dust up until the day the Games started, but when the fireworks started, that changed. I was in China that summer, and frankly surprised by the extent to which people from different walks of life cared about an event that did not concretely impact their own lives. McDonalds in Beijing were packed with ping-pong fans, all heads turned to wall-mounted TV sets to watch doubles matches with baited breath. Street venders brought portable, flickering TV sets outside to watch the opening ceremonies. College students from nearly every corner of China can tell you stories about the mood in their dorms when friends gathered to watch the Games. Sure there was hype, but also genuine enthusiasm.
Not so the Shanghai Expo. Few non-Shanghaiese seem to care. In the city of Chongqing, a business hub in southwestern China, I've been taking an informal poll; reactions here range from uninterested to slightly resentful.
At root, the Beijing Olympics was an opportunity for the government of China to put on a grand show for its own people, and secondarily the world. Before the Games even started, the Olympic torch relay followed an extraordinarily long and winding path through much of the Chinese hinterlands, with official pronouncements and media coverage every step of the way; the message was that glory should be shared. Certain glitches that offended international audiences - such as a young starlet who was outed for lip-synching in the Opening Ceremonies to a less attractive peer's vocal track -- hardly fazed the domestic audience, which was the primary target.
In contrast, the Shanghai Expo is about the government of the city of Shanghai putting on a show for the world, and secondarily other cities in China. It's about attracting business opportunities and stoking rivalries - between Shanghai and other large cities in China, and between the various countries that have poured money into building the biggest and boldest exhibition pavilions. It's a show, in other words, mainly of interest to its participants.
Maybe Shanghai will get substantial bang for its buck, in terms of future business or international clout. But most of China is tuned out.
PETER PARKS/AFP/Getty Image
What does China do when pork prices fall too law? Bolster the frozen pork reserve of course!
The porcine price plummet has forced the government to add to its much vaunted frozen pork reserve, a series of icy warehouses around the country it set up a few years ago to stabilize pork prices.
I'm imagining a Goldfinger-type plot in which a mad pig farmer from Hunan province attempts to wipe out the pork reserve...
In any case, the piece from the Wall Street Journal's China Realtime Report blog has a lot of intresting info, including the fact that there are over 446 million pigs in China. That's one for every three people and more than the next 43 pork producing countires combined!
Google's January investigation into Chinese hacking of over twenty companies and the emails of dozens of human rights activists has highlighted an increasingly potent form of espionage:
"Cyber espionage is the great equalizer. Countries no longer have to spend billions to build globe-spanning satellites to pursue high-level intelligence gathering, when they can do so via the web..."
That is from a joint report released today by the Information Warfare Monitor and Shadowserver Foundation called "Shadows in the Cloud". It details how China-based hackers stole secret documents from the Indian Defense Ministry, the Dalai Lama's offices and the U.N over the past year. Although the report acknowledges no Chinese government link to what they dub the "Shadow Network," the information harvested is unlikely to be of much benefit to individuals. It includes secret assessments of India's security in regions bordering Tibet, Bangladesh and Myanmar; missile systems; information on the domestic Maoist insurgency; and embassy assessments of Indian relations with West Africa, Russia, former Soviet republics and the Middle East.
Reuters neatly summarizes the report's conclusions into how the attackers operated:
"The cyber-spies used popular online services, including Twitter, Google's Google Groups and Yahoo mail, to access infected computers, ultimately directing them to communicate with command and control servers in China"
Although the Chinese government has denied any involvement and made clear that it views hacking as an international crime, it will be interesting to see if it investigates such hacker networks operating from its territory. There is surely enough evidence to do so. On the other hand, it is no secret that the U.S. also hosts a large number of the world' cybercriminals; a recent report from Symantec's Message Labs showed that while the bulk of the world's targetted email attacks (28 percent) originate in China, 14 percent originate in the U.S.
In fact, since the Google-China debacle exploded, grievances in the American media have seemed to focus on freedom of speech and freedom from censorship rather than on issues of espionage. The Indian press also seems somewhat unconcerned -- the report has gotten little attention there and the Chinese government has brushed it off as media hype. It just seems that all parties are resigned to the fact, at least tacitly, that this is the way things work nowadays.
As anyone who's attended a Bob Dylan concert in the past decade knows, the man ain't what he used to be. But it's not just the music that's changed (many fans complain that during shows Dylan alters the arrangements of his songs beyond all recognition); it's also his thinking on the relationship between art and commerce (read: "selling out").
But all the same, it's hard not to feel some sympathy for his fans with news that his upcoming East Asia tour has been cancelled following the cancellation of shows in Shanghai and Beijing.
Most media outlets have explained the cancellation as the result of Beijing's intervention. According to this narrative, Chinese government officials refused to grant Dylan permission to play in China because they feared the potentially subversive effects of his music on Chinese listeners.
While the dramatic appeal of this explanation is obvious -- it rehabilitates Dylan's protest singer-songwriter image, and imagines him as a poet-hero determined to challenge Beijing's censorship and authoritarianism -- as was the case with Google's pullout from China, there might be a simpler, more cynical explanation to be had: greed.
The Chinese government did not deny Bob Dylan permission to play in China. It was the Taiwanese promoter's outlandish financial requests that made the tour unrealistic."
While we'll probably never know which explanation is correct, Mexico's certainly seems to jive better with the fact that Dylan cancelled the entire tour rather than just the China shows.
Food for thought next time you're considering another one of Dylan's Greatest Hits album.
Kevin Winter/Getty Images for AFI
The Sydney Morning Herald reports that in an effort to secure the release of four of its executives who were convicted on corruption charges in China last week, mining giant Rio Tinto has secured the services of a guy who knows a thing or two about making deals with Beijing:
Dr Kissinger, 87, is well known in China since his secret 1971 meeting with Premier Zhou Enlai paved the path for the US president Richard Nixon's historic meeting with Mao Zedong.
The Herald understands Dr Kissinger helped secure a meeting on Rio's behalf with Wang Qishan, a Politburo member and former banker who handles many of China's international financial affairs.
As FT Alphaville notes, Kissinger's consulting firm advises corporate clients on government relations and is very active in China.
Hat tip: China Digital Times
GoDaddy, the web domain registration company better known for its risque Super Bowl commercials than its political principles, announced today that it will stop registering domains in China in protest against cyber attacks and censorship:
"We believe that many of the current abuses of the Internet originating in China are due to a lack of enforcement against criminal activities by the Chinese government," Christine Jones, Go Daddy Group Inc general counsel, told a congressional commission hearing on Wednesday.
She said GoDaddy had repelled dozens of extremely serious attacks that appear to have originated in China in the first three months of 2010. GoDaddy would, however, continue to manage .cn domain names of existing customers.
"Our experience as been that China is focused on using the Internet to monitor and control the legitimate activities of its citizens, rather than penalizing those who commit Internet-related crimes," Jones said.
I'd be interested to know how much business GoDaddy is actually doing in China. Maybe I'm just being cynical, but since GoDaddy's whole business model depends on grabbing media attention, they may figure that the good publicity is worth taking a hit in the Chinese market. Not sure if it will be as effective an attention-grabber as those Danica Patrick ads but worth a shot I suppose.
As the latest phase of the epic showdown between China and Google headed into its third day, it became increasingly clear that neither party is planning to back down -- and in fact, it now looks like Beijing is looking to punish the search company for its insouciance.
For its part, Google seems committed to standing on principle. James Fallows has a good interview with David Drummond, the Google vice president whose been out front on the company's move of its search portal from mainland China to Hong Kong. And he manages to clear up a mystery: What's the connection between the hack attack and Google's decision not to censor search results any more?
This attack, which was from China ... was almost singularly focused on getting into Gmail accounts specifically of human rights activists, inside China or outside. They tried to do that through Google systems that thwarted them. On top of that, there were separate attacks, many of them, on individual Gmail users who were political activists inside and outside China. There were political aspects to this hacking attacks that were quite unusual.
?That was distasteful to us. It seemed to us that this was all part of an overall system bent on suppressing expression, whether it was by controlling internet search results or trying to surveil activists. It is all part of the same repressive program, from our point of view. We felt that we were being part of that.
That was the direct connection with the hacking incident. It wasn't in isolation. Since the Beijing Olympics, our experience in China has gotten worse. Although we have gained market share, it has become more and more difficult for us to operate there. Particularly when it comes to censorship. We have had to censor more. More and more pressure has been put on us. It has gotten appreciably worse -- and not just for us, for other internet companies too.
Rebecca MacKinnon corroborates that account in comments originally intended as congressional testimony. Money quote:
China is pioneering a new kind of Internet-age authoritarianism. It is demonstrating how a non-democratic government can stay in power while simultaneously expanding domestic Internet and mobile phone use.
On the business front, the New York Times reports that Google's partners are swiftly moving to distance themselves from this move (the paper also quotes a number of pro-China scholars who profess confusion at the company's stance, though another Times story shows more balance).
China's leaders may think Google is emerging the loser here, and the company's stock has stagnated over the last few months as investors pondered the impact. "From an industry standpoint, however,
Google's exit will leave more room for international and domestic
competitors to tap into the potential of a market with the largest
online population," one China Daily article today reads. "Without Google access to pornographic and
subversive content, China's cyber space will continue to grow in a
cleaner and more peaceful environment." Uh-huh.
Ultimately, this incident could end up hurting China far more than it does Google -- exposing the country's claims of increased openness as hollow, scaring away potential investors, and taking away a valuable source of innovation and healthy competition.
But it's not just China that could end up damaged. We're definitely seeing a tipping point here in the United States, with U.S.-China relations heading into dangerous territory. When you've got Paul Krugman calling for retaliatory tariffs on Chinese goods, something is definitely afoot.
A new report from the left-leaning Economic Policy Institute claims that China's currency policies sucked away 2.4 million U.S. jobs between 2001 and 2008. That strikes me as highly dubious, but many in Washington will seize upon the figure as pressure on the Obama administration to label China a "currency manipulator" mounts. And I think the Google fracas plays into that.
The scary thing is, we all lose if a trade war breaks out. The price of Chinese imports will go up around the world. U.S. consumers will pay more for their iPhones. And China might retaliate, making everyone poorer.
I'm sure Obama's economic team -- committed free traders like White House advisor Larry Summers and Treasury Secretary Timothy Geithner -- knows all this, and is counseling calm. But sometimes the political guys win.
Beijingers woke up to find the Chinese capital covered in a film of yellow dust, as sandstorms caused by a severe drought in the north of the country and Mongolia swept into the city. Authorities issued a rare level five pollution warning, signalling hazardous conditions, and urged residents to stay indoors.
Time magazine's cover current package is the third of their annual “10 Ideas” issues; this time it’s forward-oriented, focused on "10 Ideas That Will Shape the Next Ten Years." One of those is a piece on the U.S.-China relationship by yours truly: “The Indispensable Axis: Their frenemy-ship will shape the decade.”
Every concept need some catchy jargon, right? A year ago we heard a lot in Washington about the "G-2," the notion that an expanded bilateral relationship between Washington and Beijing might steer the world. Well, there's certainly a lot less of that talk lately. Not only because heightened tensions between the two countries on myriad fronts have since taken the shine off the idea, but also because the notion of grand pooh-bahs from the U.S. and China hashing out the world order in grand summits was always a bit starry-eyed anyway. Last year, Elizabeth Economy and Adam Segal of the Council on Foreign Relations sliced and diced that notion in a very smart Foreign Affairs article, "The G-2 Mirage." (Summary: "A heightened bilateral relationship may not be possible for China and the United States, as the two countries have mismatched interests and values. Washington should embrace a more flexible and multilateral approach.")
It's telling that one of the strongest proponents of the "G-2" concept has been former National Security Advisor Zbigniew Brzezinski, whose vision of how two superpowers get along (or don't) was shaped by the Cold War. But we aren't really back to the U.S.S.R. Although Soviet-era memories and defensive reflexes are apparently never far from the thoughts of Washington and foreign-policy elites (in his New York Times column, Tom Friedman is lately fond of billing China's expanding green-tech manufacturing sector as the "New Sputnik," tapping into latent anxieties on Capitol Hill), we aren't headed for a new Cold War. The U.S. and China are far too mutually dependent and economically intertwined -- a notion that's been widely explored in recent books and already birthed its own jargon, from Niall Ferguson's "Chimerica" to Zachary Karabell's "Superfusion."
So if we aren't going to see future smoke-filled summits on par with Yalta or SALT negotiations in which the leaders of two superpowers decide the world's fate -- nor a cozy alliance resembling the United States' "special relationship" with Britain -- what will we see? With apologies to Madeleine Albright, who declared the United States as "the indispensable nation," here's how I frame the next decade of the U.S.-China indispensable axis:
There is no precedent for this unique evolving relationship, one in which the two sides will both compete and cooperate, perhaps simultaneously, as they shape and support a global system they can benefit from.
In some ways, this axis might resemble the fluidity of the G-8, the group of industrialized countries that cooperate on economic issues where they share interests but go their separate ways on issues where they don't. Washington and Beijing will increasingly be the 800-lb. gorillas in multilateral architectures like the G-20 or Asia-Pacific Economic Cooperation while developing a shifting bilateral relationship, working together closely on some issues and hampering each other's unilateral actions on others.
The good folks at Time, bless 'em, shortened this in the headline to: "frenemy-ship."
Chinese officials have evidently had enough reporters' increasingly freewheeling free-market attitude, and are planning to send them back to the woodshed for some old-school Marxist ideological training:
China will toughen requirements for reporters by launching a new certification system that requires training in Marxist and communist theories of news, a media official said, citing problems with the current crop of mainland journalists.[...]
Communist theories of journalism say media should serve the leadership and not undermine its initiatives — a stark contrast to the independent government watchdog role many democracies embrace. [...]
"Comrades who are going to be working on journalism's front lines must learn theories of socialism with Chinese characteristics and be taught Marx's view on news, plus media ethics and Communist Party discipline on news and propaganda," Li told Xinhua on Monday.
The Heritage Foundation has pulled together a fascinating study of Chinese investment -- showing (with really nice charts and maps!) just where all of those yuan are heading overseas.
A few things to note, plus one question....
Chinese President Hu Jintao has mysteriously given up on micro-blogging before ever really getting started.
China’s President startled the internet at the weekend by opening a micro-blog – the Chinese equivalent of Twitter.
Fascinated netizens began signing up at the rate of more than ten people a minute. But a day later the account of Hu Jintao disappeared.
A brief pro-forma note this morning on the empty site, hosted by the Communist Party mouthpiece People’s Daily Online, said simply: “This item cannot be found, the author may have erased it.”
That fails to explain the mystery of the president’s missing micro-blog.
Did the famously cautious leader of 1.3 billion people decide he wasn’t ready for such open interaction? Has he joined the ranks of those censored by the Great Firewall of China? Was it a case of identity theft? Had the People’s Daily failed to carry out the proper checks? Or was it a simple computer error.
Hu hadn't even posted a single tweet or adding a picture (see above photo) to his account. This is a rare instance where the Kremlin seems to be more on the cutting edge than Beijing.
Chinese entrepreneur Huang Guangyu's rise from street vendor to chairman of Gome, the leading consumer electronics retail chain in China, had all the hallmarks of the classic rags-to-riches tale of modern China -- until it all came tumbling down.
Last November Huang, who has been valued as the richest man in China, was taken into police custody. This week Huang was formerly indicted on charges including bribery and insider trading. His trial -- and the public response to it -- will be something to watch. How does one become a billionaire in China? Is there a "clean" way to the top?
China's Xinjiang province has been without Internet access since anti-government riots last summer. At the end of 2009, the government began allowing access to a handful of government-run sites. This week the bans were lifted on a whopping 27 websites.
You might be getting tired of counting new sites being opened in Xinjiang as “news”. I know I am. If, however, you’re waiting for a single day when Xinjiang will suddenly “turn on the internet”, I have some bad news for you.
I believe China is strategically opening small parts of the internet and making headline news out of each event knowing full-well that the international media’s attention span won’t keep up. We’re already getting bored. 27 more sites are opened in Xinjiang today, 50 more next week…who cares?
Meanwhile the flow of information is being strictly controlled and authorities still take the opportunity to declare a state of freedom on the internet.
Right now the difference between internet in Xinjiang and the rest of China is determined by the way we describe the censorship. Throughout most of China people explain the Great Firewall by the number of sites which have been blocked; in Xinjiang we count how many sites have been unblocked. That's a huge difference.
(Hat tip: Ethan Zuckerman)
Stories about Chinese officials threatening to dump the dollar, no matter how implausible, are always great Internet fodder. Today's entry: This Reuters report about a couple senior PLA officers who are pushing the idea that China should retaliate against U.S. arms sales to Taiwan by selling some of the nearly $800 billion Treasury bonds Beijing has on its books.
Only at the bottom do you learn this helpful context:
But any attempt to use that stake against Washington would probably maul the value of China's own dollar-denominated assets.
We also rarely get a sense in such wire reports of just what sort of influence such officials have. Are they on the fringe? Respected insiders? Hard-liners with a growing following? That kind of information would be helpful for those of us who aren't intimately familiar with internal Chinese politics.
UPDATE: More from Ashby Monk, who quotes a correspondent in Britain thusly:
[A]t a conference ... I asked what the White House would do if it received a call from Beijing saying that “unless the USA did XX or desisted from YY by a given deadline, China proposed to sell all its dollar assets without concern as to price”.
We came to a conclusion then that it was in fact something of a hollow threat. To start with, the US authorities (via the Federal Reserve) can buy any dollar bonds the Chinese wish to sell: it will explode the Fed’s balance sheet, but it can be done. It is more problematic if the Chinese sell dollars on the FX market, as the US authorities cannot simply buy them all, as they do not have enough foreign currency and could not mobilise their gold fast enough. So the dollar’s exchange rate would spike sharply down, before (probably) spiking back up again to near the level it started at – offset a bit because one would assume that having just utilised their dollars in this way, China would not immediately buy them back and so the main forced buyer of dollars would be removed from the market.
Still think China's going to sign on to a new round of tough sanctions against Iran? Think again. China has most likely already passed the European Union to become Iran's No. 1 trading partner, the Financial Times reports:
Official figures say the EU remains Tehran’s largest commercial partner, with trade totalling $35bn in 2008, compared with $29bn with China.
But this number disguises the fact that much of Iran’s trade with the United Arab Emirates consists of goods channelled to or from China. Majid-Reza Hariri, deputy head of the Iran-China Chamber of Commerce, said that transhipments to China accounted for more than half of Tehran’s $15bn (€10.9bn, £9.6bn) trade with the UAE.
When this is taken into account, China’s trade with Iran totals at least $36.5bn, which could be more than with the entire EU bloc. No definite conclusion is possible because it is unclear how much of Iran’s trade with Europe is channelled via the UAE.
Iran imports consumer goods and machinery from China and exports oil, gas, and petrochemicals.
Today, China depends on Iran for 11 per cent of its energy needs, according to the chamber.
Look at it this way: Would the United States support hard-hitting sanctions against Saudi Arabia, which in November supplied nearly 8 percent of U.S. oil imports?
China wasted no time in heating up the 46th Munich Security Conference. In the opening address Friday, Chinese Foreign Minister Yang Jiechi strongly asserted Chinese policy, and took more than a few swipes at the United States.
Yang is the first Chinese official to speak at the annual conference, and he seemed to have turned the normally stoic affair into something much more direct and confrontational. His remarks are yet another indication of the growing differences between China and the United States.
Addressing a recent U.S. arms sale to Taiwan which he called a violation "of the international code of conduct, Yang said:
The Chinese government and people feel indignant about this... We have one fifth of mankind. At least we deserve a chance to express our views on how things should be run in the world.
Yang further intimated China would block new UN sanctions directed against Iran, claimed that Chinese media was more reliable and "solid" than Western news organizations and that he didn't know how "this Google thing popped up."
JOERG KOCH/AFP/Getty Images
I hadn't seen this earlier: John Pomfret relays word that Google's declaration that it would no longer comply with Chinese Internet censorship rules was a verboten subject in Davos this year.
"At China's request, that topic was left off the table at this year's World Economic Forum in Davos, Switzerland, Josef Ackermann, chief executive of Deutsche Bank and co-chairman of the event, told Bloomberg News," he writes.
So now China is capable of silencing debate in what's supposed to be an open forum?
Here's more from Bloomberg, which quotes Ackermann saying "China didn't want to discuss Google":
At Davos, participants such as financier George Soros, economist Joseph Stiglitz and French President Nicolas Sarkozy debated technology topics such as social networking and 3-D features used in the motion picture "Avatar." The discussion didn't include the conflict between China and Google, even in panels such as "The Rise of Asia" or "Redesigning the Global Dimensions of China's Growth."
Way to tackle the tough issues, guys.
Google CEO Eric Schmidt did briefly raise the subject on his own, however, according to the Wall Street Journal:
"We like what China is doing in terms of growth...we just don't like censorship," Mr. Schmidt said, speaking at the World Economic Forum's annual summit here. "We hope that will change and we can apply some pressure to make things better for the Chinese people." [...]
Mr. Schmidt maintained Friday that Google wants to continue operating in China. But he said the company didn't want to do so if it had to operate under China's censorship laws. To operate its Web site, Googe.cn in China, Google had to agree to censor its results.
"We would very much like to stay in China. We would very much like the censorship we oppose to improve in China," Mr. Schmidt replied.
Li Keqiang, China's vice premier, didn't address the issue in his speech, but apparently insisted in private that foreign companies must follow Chinese laws.
Via FP contributor Ashby Monk, here's an interesting story from Bloomberg News that hasn't gotten much attention. It seems that Russia tried to use its vast financial holdings and conspire with China to create "economic disruptions" in the United States in 2008. An astonishing scoop, if true.
The source of the tale is Hank Paulson, the former U.S. Treasury secretary whose memoir, On the Brink, is coming out soon.
The Russians made a “top-level approach” to the Chinese “that together they might sell big chunks of their GSE holdings to force the U.S. to use its emergency authorities to prop up these companies,” Paulson said, referring to the acronym for government sponsored entities.
China rejected the idea, according to Paulson, and the Russians are denying the story. Monk, an expert on sovereign wealth funds, comments:
If true, it would appear that Russia was plotting economic warfare against the US during the summer of 2008; I don’t really know what else to call it. Their intention was to use their sovereign wealth to purposely weaken and damage the US economy. The fact that all this apparently occurred around the same time that Russia was engaged in a traditional war with Georgia, a US ally, lends some credibility to the idea.
Remember how I said 2010 would be a rough year for U.S.-China relations?
The first shoe to drop was Google's announcement that the privacy of Chinese human rights activists using its email software had been violated, and that cyberattacks on its servers had been traced to within China.
Now, China is expressing furious anger over U.S. arms sales to Taiwan -- threatening unprecedented actions in response, including sanctions on U.S. companies, and hinting darkly of a broader unwillingness to cooperate with American diplomatic priorities (read: North Korea and Iran). Military-to-military cooperation between the U.S. and China now seems to be off the table, and deputies-level talks will be suspended.
Truth be told, China hadn't been and probably wouldn't be super helpful on Iran and North Korea's nuclear programs, but the direction the relationship is taking is worrying. In February, President Obama is supposed to meet with the Dalai Lama, and that is sure to provoke further ire in Beijing.
Obama administration officials had been expecting some blowback from the arms sales, and are downplaying China's reaction, but I wonder if even they see Beijing as upping the ante. Is this going to be the usual loud, public show of anger, followed by a return to business as usual? Or is China feeling its strength and looking to demonstrate that it can force the mighty United States to change course?
I detect a bit of arrogance in Beijing right now. Most recently, Colum Lynch reports, China sent a third or fourth-tier diplomat to U.N. discussions over Iran's nuclear program. At the climate talks in Copenhagen in December, not only did China seem to renege on promises it had made earlier, but Premier Wen Jiabao famously snubbed other top world powers by sending his deputy to a high-level meeting (I'm told by one participant that French President Nicolas Sarkozy was especially angry about the slight). This kind of thing may not make headlines, but it shapes other countries' willingness to make concessions and accomodate China's interests at the margins.
China is going to learn sooner or later that the famous line from Spider Man -- "with great power comes great responsibility" -- applies to real-world superpowers as much as it does to fictional superheroes. Let's just hope it's sooner.
This New York Times article about the surprising release of records from the late Mao era raises the question: Just how crazy was the Cultural Revolution, anyway?
This crazy, according to the eminent historian Jonathan Spence, as told in his landmark biography of Mao Zedong:
An announcement from the "Beijing Number 26 Middle School Red Guards," dated August 1966, gave the kind of program that was to be followed by countless others. Every street was to have a quotation form Chairman Mao prominently displayed, and loudspeakers at every intersection and in all parks were to broadcast his thought. Every household as well as a trains and buses, bicycles and pedicabs, had to have a picture of Mao on its walls. Ticket takers on trains and buses should all declaim Mao's thought. Every bookstore had to stock Mao's quotations, and every hand in China had to hold one. No one could wear bluejeans, tight pants, "weird women's outfits," or have "slick hairdos or wear rocket shoes." No perfumes or beauty creams could be used. No one could keep pet fish, cats, or dogs, or raise fighting crickets. No shop could sell classical books. All those identified by the masses as landlords, hooligans, rightists, and capitalists had to wear a plaque identifying themselves as such every time they went out. The minimum amount of persons living in a room could be three -- all other space had to be given to the state housing bureaus. Children should criticize their elders, and students their teachers. No one under thirty-five might smoke or drink. Hospital service would be simplified, and "complicated treatment must be abolished"; doctors had to write their prescriptions legibly, and not use English words. All schools and colleges were to combine study with productive labor and farmwork. As a proof of its own transformation, the "Number 26 Middle School" would change its name, effective immediately, to "The Maoism School."
And you thought your middle-school experience was rough.
China's overwrought reaction to Hillary Clinton's speech on Internet freedom yesterday has had the interesting effect of making her words seem much bolder and significant than they actually were. Here's what a foreign ministry spokesman had to say:
"Regarding comments that contradict facts and harm China-U.S. relations, we are firmly opposed," Ma said in a statement posted Friday on the ministry's Web site. "We urge the U.S. side to respect facts and stop using the so-called freedom of the Internet to make unjustified accusations against China."
China's Global Times newspaper went farther, accusing the United States of "information imperialism." It's interesting to read the London Times' write-up of the Chinese reaction, which reports that Clinton had "warned Beijing that its alleged attack on Google, which prompted the internet search engine to threaten withdrawal from China, would have “consequences”".
In fact, Clinton warned that "Countries or individuals that engage in cyber attacks" -- defined generally -- would face consequences. Here's what she actually said about China (my emphasis):
The most recent example of Google's review of its business operations in China has attracted a great deal of interest. We look to Chinese authorities to conduct a thorough investigation of the cyber intrusions that led Google to make this announcement. We also look for that investigation and its results to be transparent. The internet has already been a source of tremendous progress in China, and it's great that so many people there are now online. But countries that restrict free access to information or violate the basic rights of internet users risk walling themselves off from the progress of the next century. The United States and China have different views on this issue. And we intend to address those differences candidly and consistently.
Elsewhere in the speech, Clinton mentioned China's restrictions on information, particularly religious material, but it certainly doesn't sound like the United States is planning to take concrete actions against China's Internet censors anytime soon.
It strikes me that Beijing could have issued a statement along the lines of, "Secretary Clinton is right to say that the United States and China have different views on this issue. We welcome her invitation to dialog but ask that the United States respect the sovereignty of our electronic space and unique political context. We are actively engaged in cracking down on criminals and extremists who take refuge in cyberspace."
Acting as if Clinton's temperate remarks amounted to a thrown gauntlet makes it appear to the outside world that they have something to be ashamed of. It doesn't seem like the response of a secure superpower.
MANDEL NGAN/AFP/Getty Images
In China, a few dozen mournful souls have begun a candlelight vigil outside Google's Beijing offices.(I'd love to know more about who they are). But for the most part, the debate in China over the higher meaning of Google has been more muted than in the United States, where Google's threatened withdrawl from China has been widely interpretted as a harbinger of worsening US-China relations.
Within China, the Chinese-language state-run media carried relatively cursory coverage of Google's threat to pull out of China, with scant mention of the alleged cyber security breaches. Here's the (translated) barebones text of the Chinese-language Xinhua wire story:
Google announced on January 12th that it might shutdown Google.cn and withdraw from Chinese market completely.
Google's chief legal officer David Drummond declared the announcement on Google's official blog in the afternoon of the 12th.Chinese reporter later verified the announcement with Google and Google'scommunication department confirmed Mr. Drummond's posting.
Google indicated that they will discuss with Chineseofficials about those legal issues in the next few weeks.
Google also cancelled its scheduled negotiation with China'sWritten Works Copyright Society on the 12th afternoon withouttelling why.
(That last line, perhaps, is meant to make Google sound like an especially irresponsible player?)
Meanwhile for the benefit of foreign reporters, China's Foreign Ministry did convene a press conference to state that China's laws are China's laws:
After a day of silence, the Foreign Ministry said that China welcomed foreign Internet companies but that those offering online services must do so “in accordance with the law.” Speaking at a scheduled news conference, Jiang Yu, a ministry spokeswoman, did not address Google’s complaints about censorship and cyberattacks and simply stated that “China’s Internet is open.”
Twitter is, of course, officially banned in China, but the most tech-savvy Chinese "netizens" have found a way around the Great Firewall to use the micro-blogging service nonetheless. This group is, as Rebecca MacKinnon duly observed, a highly select sampling of Chinese public opinion: "The Chinese Twittersphere -- comprised exclusively of people who aretech savvy enough to know how to get around censorship or they wouldn'tbe there -- is generally cheering the news [that Google won't continue to follow existing censorship rules]."
@Fenng Ten years online has turned me from an optimist into a pessimist #GoogleCN
That last tweet is from Zhao Jing, a prominent political writer and blogger in Beijing who writes in English-language media as Michael Anti. He spoke at length with The New York Times' Andrew Jacobs, explaining why he thought that Google’s pulling out would “set a bad example for thebusiness climate in China and make a joke of the government claims of afree Internet.”
With all the talk of Google's response to Chinese cyber-attacks, less noticed has been the attack on Chinese search giant Baidu today. Earlier today, users trying to access Baidu were redirected to the above page (screenshot via Danwei.org)saying, "This site has been hacked by the Iranian cyber army".
This same previously unkown group hacked Twitter in December. Given Twitter's well-publicized role in the green revolution, it was a logical target for pro-Iranian extremists. But what's their beef with Baidu?
In any event, strange day on the Chinese internets.
Google might be getting out of China, but international investors are going all in on Chinese search giant Baidu, the company that likely stands to gain the most for Google's departure. Here's a report from UBS via the FT's Alphaville blog:
Baidu would benefit most from Google’s departure. The Chinese search engine market is a duopoly with Baidu and Google together accounting for 90% of revenue and 95% traffic market share (Baidu itself has 62% and 74% respectively). Baidu would emerge as the dominant player with even more bargaining power with its customers. And even if Google can successfully solve this problem and continue its presence in China, in our view Baidu will still benefit incrementally from advertisers’ concerns over spending on Google.cn.
We upgrade Baidu to Buy from Neutral and PT from US$380 to US$523. This incorporates a 50% probability weighting to our new base case valuation of $453 (assuming Google continues to operate in China) and 50% weighting to our bullcase valuation of $593 (assuming Google closes its Chinese operations).
Investors don't feel it's likely that another foreign search engine, such as Microsoft's Bing, will step in to fill the void since local affilates are going to be wary about collaborating with another foreign company.
As a weird coda to this story, Yahoo, whose executives were lambasted as moral "pygmies" on the floor of congress two years ago for their role in the arrest of a Chinese dissident, for once look like they've outsmarted their arch-rival. TechCrunch writes;
In retrospect Yahoo has played China far better than Google. It pulled out of the country years ago, knowing it wouldn’t win and owns nearly 40% of the [Chinese internet portal] Alibaba, a company that very definitely knows how to grow in China. Entrepreneur and angel investor in China Bill Bishop —who hasn’t always agreed with my China coverage in the past—pointed this out, adding “Not often Yahoo looks smarter than Google.”
My colleagues here have been weighing in on Google's "bombshell" revelation that China has been spying on dissidents and human rights activists, trying to crack open their Gmail accounts, presumably with the aim of monitoring and disrupting their activities. A lot of commentary is so far focused on the immediate issue at hand -- China's crushing censorship and Google's controversial policy of accomodating it in the hopes of gaining market share (see Jordan Calinoff's excellent dispatch on how this policy has largely failed). Of course, we already knew China did this sort of thing, but having the details so dramatically thrust into the public sphere is shocking. This is going to be a huge, ongoing story, not only because Google and China are two of the biggest and most widely debated news topics in the world, but also because nearly everyone's going to sympathize with the people whose privacy and peace of mind has been violated.
There's a larger story developing though, of a very tense year in relations between China and the West. Eurasia Group's Ian Bremmer made that prediction earlier this year, and it's probably happening even faster than he imagined. In addition to this Google story, which U.S. Secretary of State Hillary Clinton has already jumped on, there's also a brewing U.S.-China fight over arms sales to Taiwan, China's recent missile test in retaliation, and a guerrilla trade war that now seems more likely to develop into a full-blown trade conflict.
By overplaying its hand with the activists, and messing with a huge global company with a massive ability to get its message out, China has foolishly just thrown away whatever goodwill it has built up over the years through its "charm offensive" -- at least in the West. Now, those arguing across a range of issues that China is a bad actor have been handed an enormous rhetorical club to beat Beijing over the head with. It's going to get ugly.
Last month Google's operations in China noticed that a sophisticated hacking operation had illegally attempted to access the records of dozens of targetted Gmail users -- specifically those of prominent human rights activists, based in China, Europe, and the United States. This information, which obviously aroused great concern within the company, wasn't made public until yesterday, when Google announced a significant change in how it would operate in China.
In a press release posted on its web site Tuesday, Google explained that it would cease to comply with China's internet censorship provisions, which had prevented users of China.cn (Google's China web portal, launched in 2006) from accessing "sensitive" sites:
These attacks and the surveillance they have uncovered--combined with the attempts over the past year to further limit free speech on the web--have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.
On Wednesday late morning Beijing time, Internet users in Beijing and Shanghai reported being able to access -- for the first time -- formerly forbidden images and web links, including photos of 1989 Tiananman Sqaure demonstrations and links to freetibet.org, through Google.cn searches. This led to speculation that Google had already removed filters.
Google's apparent defiant stand -- that it will operate freely within China, or not at all -- quickly launched a heated debate. Many applauded the company' principles; others wondered how much Google really has to lose if it does exit China, given that business there has not met expectations.
I’ll give Google this much: They’re taking a bad situation and making something good out of it, both from a human and business point of view. I’m not saying human rights didn’t play into the decision, but this was as much about business....
Google’s business was not doing well in China. Does anyone really think Google would be doing this if it had top market share in the country? For one thing, I’d guess that would open them up to shareholder lawsuits. Google is a for-profit, publicly-held company at the end of the day. When I met with Google’s former head of China Kai-fu Lee in Beijing last October, he noted that one reason he left Google was that it was clear the company was never going to substantially increase its market share or beat Baidu. Google has clearly decided doing business in China isn’t worth it, and are turning what would be a negative into a marketing positive for its business in the rest of the world.
Meanwhile, Wired reporter Kim Zetter traces some of the steps Google has taken between when it discovered the cyber attacks and now, both to protect its own employees in China and to warn the international human rights activists targeted.
[A] source who is knowledgeable about the investigation [said] that Google’s decision to disclose the attack on Tuesday was also partly due to a decision made by the other targeted companies to keep the attack under wraps.
“They made a specific decision not to go public,” the source said. “You can either go out [with the information] or not, and for whatever reason, they’ve decided not to [disclose].”
He said Google felt it was important to alert the people who are potentially affected by the attack — the activist community.
Among many looming questions, one key one is: How will Microsoft, Yahoo, and other web portals react? Is Google setting a new precedent?
One of the biggest stories of the weekend -- that some $50 billion in state funds was smuggled out of China over the past 30 years by as many as 4,000 corrupt officials -- was broken by Chinese state media. (Western sources, such as the AFP, alternatingly source China Daily and Global Times, both state-run publications based in Beijing.)
This may strike some as odd. To western readers, China Daily is famous mainly for funny headlines, as lovingly ridiculed by The Atlantic's James Fallows and others. How could state-run media, presumably not the pinnacle of tough-minded investigative journalism, break a big story? But the truth is that this makes perfect sense.
First, the original story announced a problem (massive fraud) in the context of explaining how Beijing had recently established a new task force to curb the problem. The original Global Times story, from last fall, began the gripping lede: "The Communist Party of China (CPC) is showing more grit in its determination to fight corruption by urging officials to disclose personal assets such as housing and investments ..." In general, western news outlets focus on problems, but Chinese newspapers hold back until there's also news about what the vigilant government is doing in response.
Second, the sources for this story were not uncovered through months of shoeleather inquiry and secret meetings, Woodward-Bernstein style, but rather were government officials themselves. In particular, it was a party official with responsibility for disciplining wayward cadres who was the source that revealed details of the government's recent anti-corruption investigations.
"Investigative journalism" such as we know it in the West doesn't exist in China. But it is not uncommon for the government to use state-run newspapers to publicize information about crackdowns or to shame bad-apple officials. While foreign observers tend to focus on what's left out of Chinese press accounts (what's censored), it's often forgotten what an enormous interest the state also takes in shaping a news story (pushing out information).
A virtual hat-tip for this insight goes out to Wang Haiyan, a former reporter for Southern Metropolitian Daily in Guangzhou, whom I met last spring in Oxford, UK. She was preparing a report on "Investigative Journalism and Political Power in China" and had meticulously catalogued how five leading newspapers in south China had covered corruption between 2004 and 2008 -- in almost every case, the primary source was a government official with clear reasons for wanting to publicize results of a recent government inquiry.
China and South Korea were hit by their heaviest snowstorm in six decades on Sunday. Here are few images of a buried Beijing.
A snow-replica of the "Bird's Nest" Olympic stadium in front of the real thing.
A paramilitary guard in Tiananmen square.
A tourist in Jingshan Park.
Feng Li/Getty Images
Two months after leaving Caijing magazine following a flap over editorial freedom, enterprising Chinese journalist Hu Shuli is at the helm of another magazine, New Century News. On January 4, the first trial issue under Hu's direction will be released, with the next issue hitting newsstands and the web a week later.
This is exciting news, and Hu's track record of pioneering investigative journalism bodes well. (For her efforts promoting public accountability in China, Hu was recently ranked #84 on Foreign Policy's Top 100 Thinkers List.) However, the same concerns about editorial censorship within China remain.
While the finance magazine Caijing was based in Beijing, the general-interest New Century News will be published by an economics institute on the southern island province of Hainan. Media in south China has traditionally enjoyed greater editorial independence, as the region is wealthier and more closely linked, economically and otherwise, with the outside world. But at the same time, the decision to publish outside of the capital is not insignificant. While Hu's editorial staffers, many of whom followed her from Caijing, remain in Beijing, it's not clear to what extent Caijing's influential readership of Beijing financial big wigs will also pick up New Century News.
Of course, much depends upon Hu's ability to quickly transform a low-profile academic journal into a hard-hitting must-read magazine. My hunch is that Hu may focus more on cultivating a readership outside of China, as well as within. And for that, a relocation to a (perhaps) milder censorship climate and expanded news beat will be an advantage.
Meantime, although it's less true in China than in America that all publicity is good publicity, Hu does now have a curious global audience watching closely her next move, and to a large extent, cheering her on.
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