Given the global admiration that China's economic ascendancy inspires abroad these days, it's easy to forget the mainland is run by a one-party state with a near-obsessive need to control sensitive information. It is both a 21st century economic phenomenon—and a massive surveillance state. And if you doubt that Big Brother lives on in contemporary China, take a closer look at the sweeping rollback of press freedoms in recent years.
Under Chinese president Hu Jintao, mainland journalists have been fired or jailed over stories they have published, while Beijing has stepped up efforts to shut down Web sites and expand high-tech monitoring of Internet search engines, e-mails, and blogs. The latest tightening of the information tourniquet: On Sept. 10, Beijing put in place a ban on the direct sale of financial information from international media organizations such as Reuters and Bloomberg to mainland banks and corporate customers.
Thanks to the new regulations, an agency controlled by the state-run news company Xinhua will screen foreign news reports for material viewed as detrimental to "China's national security interests." Foreign companies would also be required to work with the agency to get their information distributed inside China.
GROWING PAINS. The aim is probably twofold: Bloomberg and Reuters typically distribute some general news and commentary on politics and natural disasters with their business coverage, and that is definitely unwelcome in a Beijing that enjoys an iron grip on press coverage at home. On top of that, Xinhua competes with Reuters and Bloomberg and would presumably love to muscle in on their mainland clients.
But this step and others probably point to a larger worry on the minds of the Communist Party's upper echelon. Along with the stupendous growth of China's $2 trillion economy—which clocked a scorching 11.3% growth in the second quarter—has come huge societal strains and growing signs of unrest in recent years.
The Chinese government has seen a big upswing in what they call "public order disruptions" in recent years. The Ministry of Public Security reported 87,000 cases in 2005, up about 50% from 2003 levels. So far, some 39,000 cases have been disclosed during the first half of this year. That is somewhat better than the first half of 2005, but is still worrisome from Beijing's perspective.
MONEY FIRST. Part of the problem has been the uneven nature of China's economic prosperity. There is a widening income gap between the prosperous coastal cities and the interior of the country, serious instances of sizable government corruption, unaddressed workplace-safety issues, and an unfolding ecological disaster of foul air, acid rain, water shortages, and associated health problems.
In fairness, these problems are fairly typical for rapidly growing economies at China's stage of development. Yet ever since Chinese leader Deng Xiaoping pushed the country onto the economic reform track more than two decades ago, the implicit social contract has been basically this: Forget about democracy, but go ahead and get rich.
Things haven't exactly worked out that way for 800 million Chinese in the rural economy. The rollback on press freedom may stem from a calculation that critical news reporting (obviously never welcomed) is now absolutely, totally unacceptable when China's social fabric is being stretched thin.
NOT MY FAULT. And when it comes to the foreign news organizations, Beijing has reason to think there is little downside from its more restrictive policies. Google (GOOG), Yahoo! (YHOO), and Microsoft (MSFT) have all endured a heat blast of negative publicity in the West for complying with Chinese authorities to remove information Beijing views as politically sensitive. In the final analysis, these companies believe that is the price of admission into the world's fastest growing market for personal computers, online commerce, and search engines.
And as BusinessWeek.com colleagues Bruce Einhorn and Ben Elgin recently reported, Oracle (ORCL), Cisco Systems (CSCO), EMC (EMC), and Motorola (MOT) have all sold gear and information technology to the Chinese government and police authorities that have actually helped the government's Web 2.0 surveillance regime (see BusinessWeek.com, 9/18/06, "Helping Big Brother Go High-Tech") The companies' basic argument: They shouldn't be held accountable for how the equipment is ultimately used.
China would continue to chase down Web sites and news organizations it views as subversive with or without foreign help. It fears social instability above all, and that means restrictions on chat and social network sites, video clip downloads, Net searches, and so on. But let's assume for a moment that Chinese authorities somehow manage to keep the genie in the bottle and suppress the dissemination of information they don't like on the Net for the foreseeable future. Would they really rest any easier?
SOME CREDIT. I doubt it. The root cause of the wave of social unrest China has experienced in the last couple of years has nothing to do with the ability to do an online search on "re-education camps" on the Chinese-language version of Google or read a 2,000-word Wikipedia article on the Tiananmen Square incident. (Actually, access to a popular Chinese-language version of Wikipedia was cut off by Beijing late last year on the mainland.)
Some Chinese are obviously angry about the environment, living standards, or improper land seizures by government officials. Changing that will take a serious and long-term crusade by the government to economically develop poorer regions, crack down on industrial polluters, and reprimand party comrades who abuse their political power for personal gain. Hu's government seems to recognize this threat, and to its credit has talked publicly about closing the income gap and enforcing environmental regulations.
You'd have to be pretty naive to think Beijing will ever tolerate a direct challenge to its political authority—on the Net, in print, or anywhere else. However, the Chinese government may be making a colossal miscalculation if it tries to smother all dissent that draws attention to the real challenges a society like China faces in the years ahead.
TRUTH FINDS A WAY. In reality, more freedom of expression on the Net and in the state-controlled press could be an effective tool to manage the release of social anger—and a way for Chinese policymakers to identify and try to remedy what is really affecting people's lives.
Jailing journalists, shutting down Web sites, and throwing up roadblocks to the dissemination of foreign news is all pretty heavy-handed stuff and isn't likely to pay off over the long haul. The truth usually gets out in the end, regardless of what roadblocks to information a government erects.
Brian Bremner is BusinessWeek's Asia Regional Editor based in Hong Kong
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