Chairman Rubert's little red bucks

Murdoch and the People's Daily try to make the Web safe for China's Communists.

Published February 20, 1997 1:04PM (EST)

to aficionados of either Chinese Communist propaganda or digital
hype, the rhetoric of ChinaByte, a new Chinese-language Web site devoted to technology news, has a familiar ring. "The
overwhelming power of the tide of the information revolution" is finally
hitting China's shore -- thanks to this first product of a joint venture
between China's People's Daily newspaper and Rupert Murdoch's News

As the 20th century winds down, "revolution" has
become a much devalued word, nowhere more so than in China. But it
would be hard to imagine a better demonstration of just how bankrupt
the term is today than ChinaByte.

Consider the Web site's lineage: On one side, there's the
arch-conservative Murdoch, eager to cut deals with dictators of any
ideology in pursuit of a global media monopoly. On the other, there's the
People's Daily, the mouthpiece of the Chinese Communist Party,
probably the most ruthless and successful cabal of killers in power today.
As they joke in China: "The only thing
you can trust about the People's Daily is the date."

To many optimists, the words "information revolution" carry some
dream -- if not always the reality -- of individual empowerment or bottom-up democracy. But the information revolution, ChinaByte-style, is
something different. For China's rulers, it means grabbing the economic
benefits of Western technology without ceding an iota of state power.
For Murdoch, it means exploiting the synergy of his cross-media holdings
-- books, newspapers, film and television -- to create an advertiser-friendly global market that never irks the local authorities.

Murdoch and the Chinese Communists -- it's a match made in hell,
and the courtship hasn't always gone swimmingly. News Corp. has a
dominating media presence in Australia, the United States and Great
Britain. It owns TV Guide and Twentieth Century Fox, the London Times
and the New York Post and satellite television networks in Asia and
Europe. It's set to roll out major digital television services in Japan
and India this year. No other media company -- not Disney, not Time Warner-- has such an extensive global
presence. But China, potentially the largest market of all, has also been
one of the hardest to crack.

China's leadership holds everyone at arm's length. But it has
especially distrusted Murdoch since 1993, when News Corp.
purchased a majority stake in the Hong Kong-based STAR
, a network whose satellite footprints trample over nearly all of Asia. Murdoch immediately infuriated Chinese leaders with his announcement that satellite technology posed an
"unambiguous threat to totalitarian regimes everywhere."

Not the best way to endear yourself to one of the most totalitarian
regimes anywhere -- but Murdoch soon mended his ways. In 1994, after
complaints from Chinese officials, he booted the BBC's television news
service from STAR. In the same year, News Corp.'s publishing division,
HarperCollins, followed that gesture of good will by publishing an
English-language version of an officially approved biography of China's
paramount leader, the late Deng Xiaoping.

Such tactics are nothing new for Murdoch, who has assisted his
efforts to gain regulatory relief in the United States and Great Britain by
offering million-dollar book deals to Newt Gingrich and Margaret

"Murdoch, more than most, has practiced this time and time again,"
says James Ledbetter, media critic for the Village Voice. "He thinks
absolutely nothing of making alliances with some of the worst
dictatorships known to man. All his celebration of Western moral values
goes right out the window when it comes to business."

Murdoch's rewards came quickly. In 1995, News Corp. landed a 20-year, $5.4 million joint venture with the People's Daily. And in 1996, a
second deal launched the Phoenix Satellite Television network, a
package of three Chinese-language television channels aimed at the
mainland Chinese market. Finally, in 1997, came the first tangible payoff
from Murdoch's maneuvering -- ChinaByte.

ChinaByte's managing director, Bruce Dover, says no "favors" were
involved in Murdoch's deal with the People's Daily. And some analysts
dispute the notion that the deal was a quid pro quo for Murdoch's earlier
moves. STAR is still banned for most Chinese, and Phoenix's distribution
efforts have gone nowhere, they say. "China is not ready for Rupert
Murdoch," said one Hong Kong-based telecom specialist.

Ready or not, ChinaByte is a clear News Corp. toehold in the Middle
Kingdom, and so far, it is apparently quite successful. After debuting on
Jan. 15, ChinaByte has been attracting 80,000 to 100,000 hits a day,
according to Dover, and the numbers grow by about 10 percent a week.
Dover plans to start selling advertising in a month, and he is thrilled by
the unexpectedly heavy response. It is proof, he says, that the "the
second fastest-growing personal-computer market in the world" (after
Japan) is primed for further exploitation.

Dover, a longtime Asia hand and former journalist permanently
stationed in Beijing, where ChinaByte's offices and Web servers are
located, sees no contradiction in doing a deal with the People's Daily.

"At the end of the day, it's a business decision," he said, "We see it
as access to a market."

News Corp. furnishes the technology and the financing -- some $2.5
million for ChinaByte alone. The People's Daily provides the
content -- a standard mix of infotech reporting that includes columns on
how to use the Internet, product reviews, e-mail newsletters and a
library of shareware software offerings from Ziff-Davis, the largest
publisher of computer magazines in the world (now owned by Softbank,
the Japanese conglomerate).

This division of responsibility means that News Corp. need not worry
about stepping on the censor's toes: The censor is the content
provider. "If anyone should know what's acceptable, it would be them,"
said Dover.

That's vital knowledge for anyone publishing in China, where
navigating the line between acceptable business coverage and political
transgression is, as former Chinese newspaperman Zhang Weiguo notes, "a big headache" -- even for the Party leadership, and especially when the topic at hand is
as complex and potentially subversive as information technology.

"On the one hand they see encouraging technology as a way to
raise the standard of living for the masses, but on the other hand they
realize that it is very difficult to control the use to which new technology
is put," said Zhang, a former editor at the now-defunct Shanghai
Economic Herald, a brash critical voice closed by Chinese authorities as
part of the post-Tiananmen massacre crackdown in June 1989.

It's as tough for the People's Daily as anyone else. In the
introduction to ChinaByte, the publishers declare that now Chinese
speakers all over the world will be able to "fully enjoy the boundless and
inexhaustible knowledge available on the Internet." But at the same time
as ChinaByte executives announce that at last there's a place to go for
"all these computer-literate Chinese on the Net (who) have never had
anything to access before," the Chinese government is busy making
sure that Chinese citizens are forbidden access to a swath of
Chinese-related Web sites -- precisely those Web sites that have long
been demonstrating the Internet's real information-delivery potential.

China lifted its blocks on mainstream Western Web sites belonging to
the Wall Street Journal and CNN last month, but the operators of the
main Chinese Internet gateways are still preventing direct access to
long-established expatriate-operated sites such as the China News Digest, Human Rights in China and The International Federation of Chinese Scholars and Students.

The restrictions aren't watertight. James Xie, an Internet activist at
the University of Chicago, maintains a Web page that details
methods for circumventing the blocks. Both inside and outside of China,
there is no shortage of the technical skills or programming prowess
necessary to manipulate the Internet's many computer protocols for
mutual benefit. In particular, the long-established "overseas Chinese"
communities that dot the globe have been sending their best and
brightest to electrical engineering departments and top-notch research
laboratories for decades. The Internet is nothing new to them.

In fact, far from being digital Johnny-come-latelies, the Chinese --
outside of China -- took to the Internet early and vigorously. The student
protests that led to the Tiananmen crackdown played a major role in
spurring the creation of mailing lists, e-mail newsletters and Usenet
newsgroups as thriving forums for sharing information about the
democracy movement, Taiwanese-Chinese relations and other
politically volatile issues. China News Digest says it receives some 200,000 to 400,000 hits a day and operates a series of newsletters with tens of
thousands of subscribers all over the world. Today, thousands of
Chinese-oriented Web sites, in English and in
Chinese, cover everything from Taoist philosophy to Chinese-language computer shareware.

This, of course, is the true information revolution, unsubsidized by
advertisers or mighty media conglomerates. But is it enough? For while
ChinaByte is far from the only place for Chinese to go on the Net, it is
nevertheless the best-funded and best-equipped Chinese-language
Web site. It enjoys the benefits of the double-barreled marketing and
promotion machines of the Communist Party and News Corp. A source
for neutered info-tidbits and pasteurized technology-news pap, it is a
model demonstration of what more Western involvement in the Chinese
economy looks like, if conducted according to Chinese terms. ChinaByte
is the counter-revolutionary future of the Net -- slick, smooth and
inoffensive to everyone. There will be no rough edges in this corporate
future, and that's exactly the way News Corp. wants it.

Both the expatriate Chinese community and the Western business
community believe that increased contact with the West will lead to
greater human rights and freedom in China. "Engagement" must lead to
more democracy; a rising standard of living will eventually break the back
of one-party rule. It happened in Taiwan. It happened in South Korea.
Why not China?

Even the most staunch dissidents argue that the Party leaders'
attempts to resist the flow are bound to fail. Blockading the Internet, in
particular, is "like using a brick to stop a flood," according to Xiao
Qiang, executive director of the New York-based Human Rights in China
watchdog group.

But other observers, bruised by years of China-watching, are less
optimistic. While it is true that the Chinese enjoy far more access to
information than ever before, China's government has still effectively
squelched those forms of expression it perceives as a threat. Holding the
line against unacceptable expression, while still maintaining one of the
world's faster economic growth rates, hasn't proven to be that big a
"headache" after all.

In recent years, the Party's grip over intellectual expression
that might challenge state control has actually tightened, according to
Orville Schell, dean of the UC-Berkeley School of Journalism and author
of numerous books on China.

"They have been more successful than anybody imagined they
would be or could be," said Schell. "They've closed down a number of
publications. This doesn't mean that they have brought everything to a
standstill, but certain key organs of control remain very much responsive
to the Party."

The People's Daily is one of those organs of control. The days when
the subtext of each phrase in the newspaper meant life or death to its
readership may be long gone. But as ChinaByte demonstrates, the
hoary old behemoth is still fit to stake a Party-approved place in
cyberspace. So far, in China, the information revolution, as midwifed by
News Corp., is no threat to the status quo.

"I think a lot of digital revolutionaries," said Schell, "believe that
the information revolution is uncontrollable, but I'm not so sanguine. I
think it's uncontrollable for the hard-core hackers, but for ordinary
people it's quite controllable."

Especially when Rupert Murdoch lends a helping hand.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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