By Col R Hariharan
In the biggest clean up since the Covid-19 was brought under control, China has recently launched a multi-pronged regulatory crackdown on a broad range of industries, thus raising a lot of uncertainties. This can be interpreted as China’s Communist Party (CCP) under President Xi Jinping’s way of reminding tech giants and other big businesses who are calling the shots.
According to China watcher and author Deter Tiff Roberts: “Beijing is intent on strengthening control over private companies and foreign investment,” reserving shares in essential sectors like semi-conductors for domestic use and boosting the role of state-owned firms. More importantly, the regulators also appear to be concerned about younger population straying from “patriotic path” under the influence of online media controlled by foreigners.
President Xi Jinping laid down the rules of conduct for the use of cyberspace for informatization process as early as February 2014, in his address to the Central Cyber Security and Informatization Group (CCSIG). He said: “The Internet is not a place outside the law. Using the Internet to promote the overthrow of state power, instigate religious extremism, promote national separatism, instigate violent terrorist activities, etc., such behaviour must be resolutely stopped and cracked, and must not be allowed to prevail.”
He added that using the Internet to conduct fraudulent activities, spread pornographic materials, conduct personal attacks, peddle illegal items, etc must be “resolutely controlled” and must not be allowed to prevail. This would indicate that weaponization of information was always part of the CCP agenda.
In the same meeting, Jinping called the core technology of the Internet as “our biggest hidden danger as the core technology is restricted by others.” He compared any Internet company heavily relying on foreign countries to core components relying heavily on foreign countries where the lifeline of the supply chain is in the hands of others. He said it was like building a house on someone else’s wall, no matter how big and beautiful it was. It may not be able to withstand wind and rain, and may even be vulnerable. He said that “if we want to grasp the initiative in our country’s Internet development and ensure Internet security and national security, we must break through the core technology problem and strive to achieve ‘curve overtaking’ in certain areas and aspects.”
A few days back, Yahoo Inc. pulled out of China, citing an increasingly challenging operating environment. In a statement, the internet service provider said: “In recognition of the increasingly challenging business and legal environment in China, Yahoo’s suite of services will no longer be accessible from mainland China as of November 1.” Yahoo’s withdrawal is largely symbolic as China’s digital censorship has already blocked many of its services.
The entertainment industry in China has been asked to shun artists with “incorrect political positions”, strictly enforce pay caps for actors and cultivate a “patriotic atmosphere” for the industry. It is part of the State’s efforts to crush celebrity fan culture. Already, sale of fan merchandise has been banned.
Gaming companies have also faced the wrath of regulators who slapped restrictions on the amount of time players under the age of 18 can spend on online games on weekends and holidays to curb game addiction.
China has already started tightening the rules for big tech IT companies. Last year, it halted at the last moment the planned IPO of Ant Group, a giant internet finance company in New York. Now, it is framing rules to ban internet companies, whose data poses potential risks from listing outside the country.
Cloud computing is also facing uncertainties as China is building its own State-backed cloud system that is likely to challenge tech giants like Alibaba, Huawei and Tencent Holdings. The State is also seeking to tighten the oversight of algorithms tech companies, including e-commerce companies and social media platforms, use to target users. The Cyberspace Administration of China has said that companies must abide by business ethics and principles of fairness and should set up algorithm models that do not entice users to spend large amounts.
The Chinese government has also introduced regulations to bar private tutoring companies from raising capital overseas. The rules say tutoring centres must register as not-for-profit companies. Now they will not offer subjects taught in public schools; holding classes on weekends and holidays is banned. China has a highly competitive education system like India; this has made tutoring services popular with parents.
The banking sector has issued regulations to tighten control of online loans by finance companies. The Cyberspace Administration of China has asked Didi Chuxing, the top ride hailing company, to stop accepting new users after it went public on the New York Stock Exchange last June. Already financial regulators have slapped curbs on cryptocurrency sector, barring banks and online payment firms from using cryptocurrency. Provincial governments have also barred use of cryptocurrency. The government is also sorting out the issue of property management sector to improve order. Efforts to curb rampant borrowing in real estate sector is in place; caps have been imposed on borrowing of developers and property loans by banks.
In this turbulent environment, we can expect China to tighten control of media, both at home and abroad. Last March, a report of the Foreign Correspondents’ Club of China (FCCC) said that China used coronavirus prevention measures, intimidation and visa curbs to limit foreign reporting in 2020, ushering in a “rapid decline in media freedom”. The FCCC annual report said in the 150 responses it received for a third year in a row that no journalist said the working conditions had improved. The report said: “All arms of State power, including surveillance systems introduced to curb coronavirus, were used to harass and intimidate journalists, their Chinese colleagues and those whom the foreign press sought to interview.
BBC’s Beijing correspondent John Sudworth has reported that in addition to the heavy restrictions it places on foreign journalists trying to report the truth about its far western regions of Xinjiang, China used the new tactic labelling independent coverage as “fake news”. He had reported their own experience of intimidation by unidentified persons while travelling along Xinjiang’s desert highways. They forced them to leave one city by chasing them out of restaurants and shops, ordering the owners not to serve them. Their report on thousands of Uyghurs and other minorities being forced to pick cotton based on China’s own policy documents, were dubbed as “fake news” by China’s Communist Party-run media.
On the other hand, the results of a global survey carried out by the International Federation of Journalists (IFJ) of its affiliated unions showed China had used the Covid-19 pandemic to boost its image in global media coverage. More than half the countries surveyed in 2020 said that the coverage of China in their national media was more positive since the start of the pandemic. The Chinese were probably taking a more interventionist approach on local media coverage of China.
The report also said that more than 80% of the countries were concerned about disinformation in their national media, though only a third of them said China was responsible for it.
The report said when the pandemic started spreading, China activated the existing media infrastructure it had placed globally to seek positive narratives about China in national media and used novel tactics, such as disinformation. This is not surprising, as for the last two decades, China has been reshaping the global environment to expand the reach of its own share of state-run news outlets in tandem with its growing global reach.
According to IFJ, China appeared to have increased its own domestic and international news offering tailored for each country in non-English speaking languages. This is significant as international media was struggling to survive due to the adverse fall out of Covid-19 pandemic on economy.
We can expect China’s media strategy in full play in both domestic and international media, making it difficult to separate actual news from the fake one as it has weaponised the media. The latest example is the report in Financial Times that China had tested a nuclear-capable hypersonic missile, last August. It said the weapon “circled the globe before speeding towards its target”. However, China denied the report and said it was an experimental spacecraft and not a weapon.
The Financial Times report quoted “five people familiar with the test” to say that the rocket carrying the hypersonic glide-vehicle flying on a low space orbit missed the target by “about two dozen miles.” The report said the test showed China had made “astounding progress” and wondered why the US often underestimated China’s military modernisation. Whether China has actually carried out the hypersonic missile test or not, the report has aggravated global paranoia about China’s capabilities because hypersonic missile can penetrate the missile shield.
—The writer is a retired military intelligence specialist on South Asia associated with the Chennai Centre for China Studies