WSJ Journalist Bounced from China and Why It Matters

The Washington Post reported today China denied the visa renewal for Chun Han Wong, a Wall Street Journal reporter. The action came after Wong helped write a report on allegations the cousin of Chinese president Xi Jinping was involved in gambling and potential money laundering in Australia.

As the Post pointed out in the past the Chinese government has retaliated against foreign journalists through the visa process for stories that discussed the private lives and wealth of the families of the country’s ruling elite.

A 2012 Bloomberg News investigative report disclosing the Xi family’s investments resulted in a visa ban for the news agency that was only lifted after extensive discussions between Bloomberg executives and Chinese officials.

At least half a dozen correspondents for the New York Times faced lengthy delays receiving new visas or were expelled outright after the Times published a similar expose that year about former Chinese Premier Wen Jiabao’s family wealth.

Why is this important?

Basically without independent reporting from China the global public would have little information about what is going on in that country. We would not know the economic and social pressures that are at play in the world’s second largest economy and up and coming military power.

And that is what dictators like the Communist Party leadership in China want. They don’t want information about the cracks and flaws in their society. They are especially afraid of the Chinese people learning about  see the lavish lifestyle they lead.

Traditionally the big fear is an outraged farmer class. In the past the governments of China have tolerated a lot of push back from farmers because of their large numbers.The party’s biggest fear is that these farmers would see how well the leadership is living and compare it to the bone-crushing poverty the rural class faced.

Now, however, there is a growing middle class and these folks want to see continued growth. They are also more educated. So they know corruption impedes economic growth. So it is this danger the party leadership faces. They do not want the rising middle class to know just how much wealth the leaders have. Or how they give unfair advantage to their family members.

So for the party leadership their very survival depends on controlling the press and keeping their dirty laundry hidden. And that is why journalists who do what journalists do — finding and reporting on facts — are such a danger to the Chinese government.

The rest of the world needs to know this information because we have to live in a world where China is a major player. Whether it is economics or military, China has a role. And we need to know if they are playing fair or if they are cheating. (And then take appropriate steps.)

Knowing about a government leader’s family connections to wealth and possible criminal activity is a vital part of knowing how to deal with that leader.

And that is what a free press is all about.

China Continues on Road of Information Supression

One thing you have to give to the government/Communist Party leadership in China is that they are ever vigilant about ways people can get information.

In the early days it was merely controlling the newspapers and radio stations. Now, with the Internet and SMS with mobile phones, the Party has been in the forefront of keeping the outside world from informing the Chinese people.

It is almost an annual event that new regulations about online news organizations are put forward.

• 2005: “The most obvious feature of the new regulations is that they focus on “Internet news.” The following statement from the official news agency Xinhua makes the intention clear: “The state bans the spreading of any news with content that is against national security and public interest.” The regulation defines “Internet news” as, “current events news information, and includes reporting and commentary relating to politics, economics, military affairs, foreign affairs, and social and public affairs, as well as reporting and commentary relating to fast-breaking social events.”
• 2016: Last month (July), the CAC released new rules prohibiting news websites from using social media as a source, and later announced fines for major internet news sites for publishing independent content. These new rules on internet news reporting come amid the Xi administration’s steady increase of control over the news media in China.

To back up all the rules and regulations, the government has the Great Firewall of China in an effort to block outside influences. (New York Times, twitter, Facebook, etc.) And they have a cadre (some say millions) of people hired to actively counter any “non-positive” comments about China on the Internet. This group is known as the Fifty Cents Party because people are reportedly paid 50 cents for each comment they attack with a “positive” message.

Needless to say, Chinese netizens have had some fun with the 50 Cent Party

• “Training manual”
• Comics
• And even parodies of ads:

Maybe censorship is the government’s way of ensuring full employment, because reportedly millions are employed to monitor and report on unauthorized information on the Internet.

All this is in addition to the pronouncements of President Xi that the role of the media (and journalists) is to be a lap dog for the Party: “[Journalists] must love the party, protect the party, and closely align themselves with the party leadership in thought, politics and action,”Love the Party” first. 

Needless to say, such a position is a violation of the ethics of any independent journalist or honest news organization not matter what country.

In addition to the Chinese government and ruling party doing all they can to stop information they don’t control from coming in, they are also trying to control what news outlets outside China can and should say:

• Australia: Chinese language newspapers in Australia: Beijing controls messaging, propaganda in press – Sydney Morning Herald
• Hong Kong: As Beijing tightens grip on Hong Kong media, mainland journalists suffer – Committee to Protect Journalists

The communist theory of media control is as old as Lenin setting up Pravda. The difference now is that there are so many different ways to get information thanks to mobile phones and the Internet that repressive government such as the one in China must waste more and more money on monitoring and jamming sites that might carry unauthorized material.

And to be sure, China is not alone. Nor are communist countries the only ones that go in for massive intrusion into Internet freedom. Just think of Turkey (pre- and post-coup), Saudi Arabia or Thailand.

Just think about how much more these countries could do if they focused their resources on growth and development instead of repression of free expression.

 

Prejudice: A Natural Outcome of Censorship

China Digital Times pulled a great item from an interview with Chinese publisher Bao Pu and writers Guo Xiaolu and Hao Qun (who goes by the pen name Murong Xuecun) from the June 3 issue of Foreign Policy.

The blockage of the Internet by the Chinese government means, said the authors and publisher, that people are not getting enough information to make rational decisions.

[R]elatively few people actually bypass censored information on the Internet. But why? Censorship in the long run breeds prejudice. Once you have this prejudice, you think you know everything, but you don’t. That’s why they’re not actively seeking — because they think there’s nothing out there. It’s a vicious cycle.

I have long argued that censorship means the people of a country will begin to rely more on rumors and prejudices than on cold hard facts. China’s rulers, however, say too much unregulated (censored) information leads to social instability.

What they really mean is that once people start thinking critically, the iron-heel rule of the Communist Party in China will be weakened.

And what goes for China goes for other dictatorships. Think Iran, Saudi Arabia or Zimbabwe. Even the leaders in proto-dictatorships such as Singapore and Malaysia want to control all forms of media to protect their hold on power.

Economic Stability Needs Free Press

Despite all the complaints about how poorly “the media” covered the Wall Street shenanigans that led to the 2008 Great Recession, people still turn to the unfettered and independent media outlets for news about stocks, bonds and the general state of the economy. In fact, the whole system of savings and investment would not work without a free press.

The media — and this includes knowledgable bloggers — provide the public with loads of information about what is going on in the marketplace. They look at government regulations, company news and the overall status of the market.

One of the reasons there is global support for the U.S. stock markets is because there is such a strong tradition of free and unfettered media. (And perhaps, part of the trauma of the 2008 collapse was because how poorly the market was covered at the time.)

In fact, one of the most important part of any successful stock market is a free press that is allowed to dig into company records and government actions. Look at London, Paris, Tokyo and even Hong Kong.

So is it any wonder there are uprisings and complaints about how things are going in the Chinese stock markets?

China Digital Times summarized a series of articles of how people across China are complaining about their losses in Chinese investment instruments.

According to the [Wall Street] Journal, some 1.6 million investors lost a total of at least $24.3 billion to collapsing wealth-management products over the past year. Many say they invested because of the perceived endorsement of government officials and state media, and are now demanding reimbursement from authorities.

Rather than move to make sure people got the best and most accurate information about where and how to invest their money, the Chinese government, instead, has decided to restrict even more information.

A series of leaked media directives published by CDT further illustrates efforts to manage discontent. Trying to steer a course between inciting panic and stoking further exuberance in June, the State Administration of Press, Publication, Film, Radio and Television told broadcasters not to “join the chorus of the bull or bear market. Rationally lead market expectations to prevent inappropriate reports from causing the market to spike or crash. […] Do not conduct in-depth analysis, and do not speculate on or assess the direction of the market. Do not exaggerate panic or sadness. Do not use emotionally charged words such as ‘slump,’ ‘spike,’ or ‘collapse.’”

Additional directives instruct editors to focus on “illustrative examples of steady growth,” while downplaying or holding back on anything negative about the property and stock markets.

Wall Street Journal reporter Laurie Burkitt retweeted one of the best reactions to the Chinese government actions:

In China, “the markets are like K-Y Jelly. They can play a decisive role, but they aren’t the main actor.” – Jim McGregor @AmCham_China

— Laurie Burkitt (@lburkitt) April 15, 2016

And yet, the government continues to see it self as the main actor.

Why does this matter to journalists or even the people in the United States?
A great misunderstanding of how the Chinese markets work led to a global run on markets. And yet, only after the Western markets started falling because of what was happening in China, did people start figuring out the fall was an overreaction.

There is not enough foreign investment in the Chinese market for it to be a major problem. The London consultancy Capital Economics has said foreigners own just 2% of shares. — BBC  1/7/16

The smoke and mirrors situation in China built up by the ruling elite created a situation where otherwise strong Western investment instruments collapsed in just a matter of days. To be true, the collapse of the Chinese stock markets did indicate the Chinese economy was slowing. But again, had there been better reporting in China — that is had the government NOT restricted what reporters can cover — then the news about the slowing Chinese economy would not have come as such a shock.

The anti-free press fixation of the Chinese government is not just morally wrong, but it clearly also has a direct impact on U.S. investors, including a lot of retirement funds.

By the way, this has all happened before.

Back in the early 1990’s — when I lived in Shanghai — the government opened stock markets in Shanghai and Shenzhen. The party and government leaders encouraged people to invest. The people, figuring that the government has always taken care of them in the past will guarantee they will be taken care of in the future.

When the market collapsed in early 1992, millions of people lost their life savings. Men and women in their 60s discovered they had to now work many more years and save a lot more of their earnings to prevent starvation in their old age.

At that time the government did not step in to make good the losses. Deng Xiaoping was effectively in charge and forbade any bailouts. (Except for key companies, of course.) He made it clear the people will have to learn about the ups and downs of a marketplace economy with Chinese characteristics. He even allowed for and encourages small private companies to be set up.

The new leadership, however, has seem hell-bent to restore the all-pervasive nature of the Communist Party in Chinese society. They have apparently become nervous about the growing middle class. Seems once people get a taste of economic freedom, they tend to want political and social freedom as well. And that is not allowed.

So the government stepped up it campaign to crush freedom of speech and expression — including reminding the media their job is to represent the party — and stepped up its campaign of the government being mother and father.

The Chinese leadership claims they are concerned with preserving stability and avoiding social unrest. Yet the keep taking steps that lead to more social unrest.

By restricting the media to being only mouthpieces of the government, people will turn to rumors and whispering campaigns for information. And, as anyone who has played the “telephone game” will know, what goes in at the start is not necessarily what comes out the other end.

 

No Surprise: China Seeks More Internet Control

Paul Mozur at the New York Times has it right in a tweet:

China draft law either cuts off the Internet, makes it harder to host websites in China, or does something else: https://t.co/dsGoDq6p0y

— Paul Mozur (@paulmozur) March 29, 2016

And Beijing is most likely looking at doing both.

Social stability is a major concern of the government leadership. The economic slowdown is now causing massive layoffs with more to come. Industrial workers and the growing middle class in China are now under threat of loosing the economic stability promised by the government.

For so long the Chinese government has basically told the people of China that if they — the people — don’t push for political reform, the government will implement economic reform that will make everyone’s lives better. Now that businesses in China have to start cutting back on employees, that protection is gone and the leadership is afraid the people may demand changes that will challenge the iron heel rule of the Communist Party.

Rather than deal with the issue of economic AND political reform, Beijing is just going all out to make sure information about how bad the economic situation is does not get wide distribution.

Controlling Internet content has always been a part of that plan. So now, the new rules on domain names looks to be another step by the party leadership to control information.

• NYT: Beijing Seeks to Tighten Reins on Websites in China
• China Digital Times: China Previews Murky Web Domain Rules
• Global Times (Official China publication): Draft rule targets Chinese domain name supervision