In this edition of the China Talking Points podcast, Michael and Eric tackle the politically sensitive issue of China’s censorship policies in both the new and traditional media sectors. Just what the Chinese government wants its people to know surfaced again last week when the government banned the word ‘Egypt’ (埃及) from micro-blogging sites and restricted all coverage of the Egyptian uprising to be managed exclusively by the Xinhua news agency.

In a dramatic flashback to an earlier period of Chinese media management, on the very night that former Egyptian President Hosni Mubarak stepped down from office, the People’s Daily website was among the only major international news outlets that did not mention this monumental event. Instead, the People’s Daily had a front page story celebrated increased Chinese grain production.

The Chinese government’s decision to limit access to news about the instability in North Africa is entirely predictable, however it begs the question as to whether or not the ‘cure is worse than the illness?’ That is, by denying its people access to this information how much will it cripple China’s long term ability to engage a world it increasingly dominates? Already, there are startling large information gaps among many educated Chinese about their country’s international engagement. Continued censorship of these types of events will only worsen that ignorance.

Conversely, Michael argues, the Chinese have been extremely adept at managing their information policies and if/when it is necessary to release the pressure it can do so.

We also discuss the precise measures that the Chinese employ to censor the increasingly large volume of content flowing over the air and through the ether to inform, educate and entertain hundreds of millions of Chinese. Michael explains that it is a complex blend of those famous ‘red pens’ along with the most sophisticated computer monitoring equipment on the market.

No wreaths laid or candlelight vigels held.  This was just the Chinese government implementing policy on a company that has agreed that it couldn’t adhere to them.

Google is not leaving China and China surely isn’t leaving Google.  But the US media finally has enough perspective (or learning) to consider it relatively unremarkable.

This is probably the biggest disappointment out of the whole issue.  I’d certainly like to see unfettered internet access in China, but I’d really like to see less knee-jerk reporting by American media professionals.

Sadly, this isn’t an issue that only pertains to news on China.  I fear our news cycle is starting to  illicit rapid and uninformed actions on many fronts.  Something our Chinese friends are probably more aware of than ourselves.

“Sticking it to the man” is an expression used in the United States when the underdog challenges authority. What so many Chinese observers misunderstand is that the widespread support of Google can largely be separated from the ongoing dispute with China.  Instead, it’s an impulsive reaction against authority.  We do it to ourselves just as much as we do it to others so contrary to popular opinion across much of China’s often nationalistic blogosphere this dispute in the eyes of most Americans has little to with China persay.   It is a concept deeply rooted in American history and critical to understand many disputes where Americans perceive that a major power (either a government, company or individual) is bullying a vulnerable constituent.

Consider the following examples:

• The recent election of Senator Scott Brown in Massachusetts was an embarrassment for President Barrack Obama and the Democratic party who control by the White House and the Congress.  Brown ran on a platform of “sticking it to the man” to challenge Obama and his party (“The Man”) so he could represent the “little guy.”

• The black civil rights movement led by Dr. Martin Luther King who challenged the government to change its laws about segregation in the 1960s.  In this case, the white-American government was “The Man” and Dr. King represented the “little guy” who led the rebellion on behalf of millions of powerless African Americans.  Dr. King was “sticking it to the man” in his fight for justice.

• The open source software movement’s battle against Microsoft highlights how this insurgent attitude extends beyond politics into the business world.  In this case, Microsoft is “The Man” who possesses a monopoly market share in the software sector that goes to great lengths to stifle innovative competitors that distribute rival applications free of charge.  Linux, Mozilla and even Google to some extent are all consider underdogs compared to the mighty Microsoft.

• Rocky! Yes, that Rocky.  Rocky is the quintessential American hero who stands up to powerful competitors (remember, “I vill cruuush you”?), powerful countries (Russia) and, later, powerful corporations.  No one sticks it to the man better than Rocky Balboa.

So in the context of how Americans perceive power relationships, we will frequently side with whichever party is perceived to be weaker.  Ironically, Google is frequently considered the more powerful side in most disputes but in this case it is out matched by the Chinese government.  Americans rally behind the underdog and that goes a long way in explaining the reaction to the dispute between Chinese authorities and the search engine giant.  Yes, there are a myriad of factors to be considered in this discussion however it is our firm belief that Chinese observers need to understand this critically important American cultural trait if they are to fully comprehend the scope of this dispute.

Li Kaifu (李開復) is the closest thing China has to a web 2.0 rock star.  No one else in China’s small circle of technology titans comes close to achieving the international name recognition and buzz this guy generates.  For starters, the mere fact that he was the object of a Google-Microsoft love triangle that ended him fleeing one tech giant for the other is enough to give this guy major props.  That said, separating the noise from the signal on his actual accomplishments is brutally difficult not just because it’s China but also because of the very nature of his former benefactors who themselves have very little to show for all their effort in China.

Microsoft’s business model in China has never been a good fit given that 90+% of computer users there do not pay for the operating systems that power their computers.  Furthermore, while Google vacuums up market share in the rest of the world, China remains an enigma for Larry and Sergey.

In his short time at the helm of Google.cn, Li himself failed to significantly to make a dent in Baidu’s dominance of the mainland’s search market.  So whether or not Li deserves the rock star treatment remains dubious, the fact that he has it is beyond question.  No doubt mindful that Google’s western-centric approach to the China market will simply not work, Li made the wise decision to jump ship and leverage his own fame to launch a new incubator fund for Chinese technology start-ups that are starved for early-round financing. Li’s new 115 million dollar venture fund, Innovation Works, marks an important milestone for China in its effort to pull the country from its well-deserved reputation of being a phenomenal intellectual pirate to a society that genuinely prizes research and innovation.

Superficially, it is easy for an outsider to laugh at the idea that China can become a major center of technological innovation when industry after industry suffers billions of dollars in annual losses due to intellectual property rights violations.  Visit even the smallest Chinese city and evidence of this culture of theft is pervasive:  imitation Starbucks adjacent to the DVD vendor selling the latest episodes of “24″ for 10 yuan next to the kiosk hawking fake iPhones.  Selling other peoples’ ideas as their own in China is endemic. Unfortunately, the problem runs so deep that it extends far beyond innocuous consumer goods to fake aircraft parts, pharmaceuticals and food products that all too often have potentially lethal consequences.

The same culture that fertilizes intellectual property violations on such an unprecedented, massive scale is rooted in a culture that overwhelmingly celebrates conformity.  From their first day of school, Chinese children are educated in a system that discourages independent thinking through rote learning.   On this point, too many Americans mistakenly believe that a rigid, conformist-driven education system stifles innovation.  If that was in fact the case it would be hard to explain how equally conservative educational systems in Japan, South Korea, Taiwan and even Sweden have produced so much technical and creative innovation.  So, the education system by itself is insufficient to judge a society’s ability to innovate.  In China, on the other hand, there is another, more prevalent force that discourages innovation: “the scarcity mindset.”

As even the most elementary student knows, China’s history over the past three to five thousand years is best characterized by a cycle of state expansion and contraction with consistent patterns of war, famine, stability.  It’s been in those periods of relative harmony that China has blossomed so many of the world’s most valuable inventions.  Paper, money, gun powder, etc… the list goes on and on… providing clear evidence that even within a rigid educational and autocratic imperial political system, the Chinese had an unsurpassed innovative capacity.  Conversely, while amidst a period of instability, predictably the innovative climate was understandably restrained by larger priorities (e.g. survival).   Therefore, when considering why so many of China’s most important inventions occurred in past millenia, it is worth evaluating the impact that social and political conditions had on the creative environment.  No doubt, throughout the wars, famine and uncertainty that defined China’s history in the 19th and 20th centuries the country’s ability to generate new and revolutionary ideas was seemingly extinguished.

The “scarcity mindset” is also critical in understanding the Chinese entrepreneurial mindset as it relates to the business cycle.  In the 20th century, for example, where a bruised population emerged from the horrors of Mao’s psychotic revolution, the focus for most Chinese was simply to survive and save enough money for tomorrow — “grab what you can today because you don’t know if tomorrow will be better.”  This is a powerful, little understood sentiment that plays a big role in much of the Chinese business psyche. Yes, we hear constantly that Chinese business is defined by relationships and face, etc… yet grabbing the quick buck, cutting corners and, yes, copying others’ ideas are also equally prominent.  One of the key trends to observe now is to what extent the new found stability and prosperity that exists in China’s business centers can diminish the “scarcity mindset” to ultimately spark a new wave of Chinese innovation.

Like so many other aspects of Chinese society, innovation in China is a contradiction, and even oxymoronic, given how much of the country’s current economic success is based on the replication of others’ ideas.  Yet, Li and other venture capitalists, no doubt, sense that the culture has sufficiently changed to allow a more independent thinking environment that is conducive for new wave of Chinese innovation.

CTP Podcast – Online Self-Censorship in China

Prompted by the initial implementation of authentic identification on popular sites, we’ve found ourselves considering what the impact will be on self-censorship in China.  If it does increase, what impact might that have?  For those already committed to freely expressing themselves online in China, will their behavior change?  Are the risks they face any different?

We don’t have the answers, but we tried to consider this from multiple perspectives.   One thing we did agree on, however, is that we are equally worried about the erosion of our own rights here in the US.  The last thing you want to have happen to you in either country is for the government to make a subjective decision that you present a threat.

Not like most Chinese care, though. A recent Pew Research Center survey found that 80% of Chinese think the Internet should be managed or controlled, and 85% think the government should be responsible for doing it.

via www.time.com

I am doing some background reading ahead of next week’s podcast on Internet Censorship in China. The Pew research cited by Time and other surveys like it, always pose an interpretive challenge for me.

Any society’s responses to polls are heavily influenced by social/political environs. But what if there is self censorship within the response to this poll? Something to address next week….