Overreach, page 24
At the US-China Internet Industry meeting in late 2011, I heard a senior official from the Internet Bureau spell out the kinds of criticism it would tolerate: “We draw a clear line,” he said. “We accept online supervision only on local leaders, not central leaders. People can comment on central policy, but not on the top leaders.” The CCP secretary of Beijing, in a 2013 speech to municipal propaganda officials, proudly claimed that 90 percent of the nation’s major websites and 70 percent of its total Internet traffic was in Beijing. “Let’s overcome the wrong belief that the internet is impossible to regulate,” he said.51
During Hu’s second term, that’s just what the officials did. The propaganda authorities joined forces with the security agencies to strengthen the control of online information for the purpose of stability maintenance. As a Beijing academic put it, “By 2010, Weibo created a real public sphere, so it was showdown time.”
Competitive Censorship
The Internet control effort, however, was complicated by the reality that the propaganda bureaucracies were just as fragmented as the internal security ones. Editors and Internet platform managers could take advantage of regulatory gaps and the unclear division of responsibilities between the various agencies. The Propaganda Department, as a high-level Party organ, outranks all the other agencies and dominates media censorship. The State Council Information Office, created in 1990 to improve China’s overseas image, acquired the responsibility of managing Internet news because its head, Zhao Qizheng, a Shanghai nuclear physicist brought to Beijing by Jiang Zemin, was an early enthusiast, who established a website and internal network for his organization. The Internet Information Office was later spun off as a separate department—the Cyberspace Administration of China—which was also the office for the leading group that became the Central Cyberspace Affairs Commission. The Internet Information Office was both a defender of the Internet and its censor. Its approach was more nuanced than that of the Propaganda Department, and more in line with Hu’s ideas about guiding public opinion. Television was governed by the State Administration of Radio, Film and Television; and books, newspapers, and other publications, by the General Administration for Press and Publication. The agencies fought turf battles whenever oversight of a new medium, such as online video or video games, was up for grabs.
Within a few years, the censors at the Internet Information Office had developed techniques for managing Weibo to reduce the risk of collective action while preserving the appearance of openness and the value of the information they themselves can glean from Weibo communication. First, automated filtering by key words blocks certain postings and searches and puts others in a category that requires human review. According to a Chinese estimate, in 2013 there were more than two million “public opinion analysts” working at propaganda bureaus, web portals, and commercial enterprises throughout China, and more were being trained. These online analysts screen microblogs, report their viewpoints to policymakers, and get rid of those that could stir up trouble.52 Studies of online censorship patterns in China indicate that the propaganda censors (reflecting the priorities of the Party leaders) allow criticism of the government (except, as noted, of high-level leaders and of censorship per se), but delete blogs related to group collective action even if the activity is not explicitly antigovernment.53
Censorship consists of more than filtering and excising dangerous information, however. One method of manipulating the information environment is to employ undercover online operatives to post pro-government viewpoints and create the impression that those who are critical of the government are an isolated minority. The presence of these commentators, some paid—those whom netizens disparagingly call the “Fifty Cent Party”—and some volunteers, has the perverse effect of discrediting any genuine pro-government postings. It also distorts the feedback loop when officials try to assess public opinion based on what they read online.
The Internet Information Office also tailored censorship to different types of netizens, treating ordinary users one way and opinion leaders another. They used various forms of friction to discourage ordinary users from trying to access politically sensitive information—for example, making it difficult to acquire a Virtual Private Network (VPN) to jump over the Great Firewall and access foreign news, instead of angering the users by blocking the information completely. They also distract ordinary users from politically sensitive information by flooding the Internet with photos and articles about movie star divorces and other entertaining stories. Propaganda coordinated across various media platforms and orchestrated pro-government cheerleading by paid and unpaid political activists flood the information environment and distract people from more inflammatory information.54
But the censors also confronted influential public opinion leaders, such as journalists and those known as “Big V celebrities,” with more coercive fear-based methods. Some 210 Big V celebrities (so called because their Weibo registrations are verified under their actual names) had more than ten million followers, making them the information hubs of huge social networks. The widespread influence of public intellectuals with large followings alarmed Party leaders, who felt that their own influence was slipping. Because these influential individuals could potentially rally people behind revolutionary action, the propaganda cops started cracking down on Big V personalities, beginning by targeting wealthy private businessmen with liberal ideas.
For example, in November 2011, real estate developer Pan Shiyi dropped an information bombshell when he alerted his more than 8.6 million followers to the little-known fact that the air-pollution measurements put out by the US Embassy were more accurate than the ones provided by the Beijing government. The embassy posts its measurements of the 2.5-micron particulates that pollute Beijing’s air on Twitter, which is inaccessible in China without a VPN. The public’s response to Pan’s Weibo revelation embarrassed the government and forced it to start measuring and reporting on the levels of 2.5-micron particulates in the air. Pan was summoned to a command performance on CCTV, where he was required to say that as a well-known online commentator, he, and others like him, “should have more discipline.”55
In 2011, a new method targeting public opinion influencers was real-name registration, which enabled the authorities to hold Internet users accountable and arrest them for blog posts that “spread rumors.” The chilling effect drove hundreds of millions of netizens to desert Weibo and move to Weixin (WeChat) on the Tencent platform. WeChat networks, limited to the circle of friends you select for yourself, appeared to be safer from the eyes of the propaganda cops. In recent years, however, even WeChat, once considered private communication, has been penetrated by official censors.
As propaganda censors sought to tighten supervision at the end of the Hu era, a disheartened journalist bemoaned that the control of information for people like him had become like North Korea’s. He blamed the reversal on the propaganda bureaucracy and “separate fiefdoms” operating on their own within the Standing Committee. Another journalist observed that there existed no interagency leading group for propaganda and that the Standing Committee rarely deliberated on propaganda-related issues. Officials reacted in an ad hoc matter depending on circumstances. And these changed. Li Changchun, the propaganda chief for the entire Hu decade, had originally favored openness when he came up from Guangdong in 2002, much as Hu himself did, but later changed his views.
Along with the other controls, the decoupling of the Chinese and international Internet accelerated during Hu’s second term. Facebook representatives explored joint ventures with the Chinese Internet companies Baidu, Tencent, and Alibaba, and offered to leave a copy of all its data on Chinese users inside China. The data would also be stored on Facebook’s servers outside China. But because the Chinese government insisted on localizing online communication data entirely inside China to prevent any foreign access to it, it turned Facebook down. According to a Chinese Internet executive, the leaders were deeply worried about the possibility that a foreign government, organization, or group of individuals “might simultaneously send messages to 300 million Chinese users and mobilize them to action.”
The propaganda bureaucracy’s monopoly on information management also afforded it rich opportunities for graft. In 2013, Caixin magazine investigated the large public relations industry that for a fee can arrange to have the propaganda censors scrub negative publicity about companies, or about local governments.56 As a former securities regulator told me, “Of course the Propaganda Department is working to protect particular businessmen—how could it be otherwise?” He also expressed disgust with the media people at the China Securities Regulation Commission, who arranged for the Propaganda Department to squelch news about the splitting of specific stocks to keep stock prices up. Li Dongsheng, who began as a crusading television journalist, became head of the news section of the Propaganda Department, was promoted to the position of vice minister of public security in 2009, and then was sentenced to fifteen years in jail for corruption in 2016. When I interviewed Li at the unmarked office of the Propaganda Department in 2009, he came across as an unusually reform-minded official committed to media openness. There is simply no way to know whether he was purged because he was truly corrupt, too liberal in his views, or too close to Zhou Yongkang. Or all three.
The State Advances
The disjointed policy process during Hu’s collective leadership also facilitated the restoration of the state’s management of the economy, as the central government, reversing three decades of marketization, started to steer the economy once again. China had built a remarkably successful market-oriented economy in which state enterprises accounted for just 27 percent of industrial output, 20 percent of industrial employment, and less than 15 percent of exports.57 But after China joined the World Trade Organization in 2001, some of the country’s leaders worried that the state-owned firms might not be able to withstand global competition and decided that the state might need to give them a cushion. The bureaucracy developed industrial policies that favored Chinese “national champions” and, as I noted earlier, required foreign-invested enterprises to share their latest technology to gain access to the China market. Private and foreign firms were disadvantaged as “the state advanced, and the private sector retreated (guojin mintui),” to use a catchphrase that was common at the time.58 This change in policy generated a backlash from international business and governments; it also reduced private investment and drove many private businesspeople to move their families and wealth out of the country.
The return of state management of the economy was justified by Hu and Wen Jiabao’s populist objective to build a “harmonious society” by narrowing rural-urban and regional disparities in income, health, education, and other public goods. The two leaders reoriented the economy, away from what I’ve called the “performance coalition,” meaning the financial, industrial, and commercial bureaucracies promoting economic growth, and toward more of a “welfare coalition” that prioritized wealth redistribution and technological innovation. This worked as long as those in control saw progressive policies as strengthening their control and weiwen.59 This alignment of interests made it easier for the control coalition and the economic bureaucracies to logroll together in the collective leadership.
The central ministries closely tied with state-owned enterprises dominated policymaking in the government, just as the control coalition dominated policymaking in the Party. The most powerful was the National Development Reform Commission, a comprehensive economic bureaucracy resembling the Ministry of Industrial Trade and Industry during the heyday of Japanese industrial policy, that oversaw industrial policy and macroeconomic management. The mega-agency had the power to issue commands to ministries and provinces and functioned much like the Mao-era State Planning Commission, where its bureaucratic history originated. The Ministry of Industry and Information Technology, created in 2008, allocated resources to various industries much as South Korea’s Planning Board did. The State-Owned Assets Supervision and Administration Commission (SASAC) was founded in 2003 to take ownership of the 117 national-level state-owned companies; its mission was to strengthen their management but also to protect them as a precious part of the PRC patrimony. The SASAC tried to “make SOEs [state-owned enterprises] as strong and as big as possible,” said a leading economist. The Ministry of Science and Technology also became an important player.
Wen and Hu’s drive to accelerate China’s scientific progress was also captured by state interest groups. Wen, who was head of the Party’s Leading Group on Science, Technology, and Education, convened two thousand scientists and officials, organized into twenty working groups, to plan an initiative. But the bureaucrats in the National Development Reform Commission took over from the scientists and in 2006 produced a centrally planned, government-funded system focused on sixteen megaprojects, known as the Medium- and Long-Term Development Program for Science and Technology Development. A market-reform package had been prepared by government economists but was “buried by the bureaucracy immediately after being unveiled in February 2005.”60 Instead, the bureaucracy pivoted to a nationalist strategy of indigenous innovation. Although China and the United States were getting along moderately well at the time, the government bureaucrats played the national security card to get support for state investments in research and development, arguing, “Experience shows us that we cannot buy true core technologies in the key fields that affect the lifeblood of the national economy and national security.”61
The state-led effort was well suited to the oligarchic rule in Hu’s administration. The technology pork barrel was divvied up among the various industrial interests and their bureaucratic godfathers, the more the better. The 2006 Medium- and Long-Term Plan designated sixteen megaprojects, nine civilian and seven military/dual use, each of which had a supervisory ministry in the central government and a high-level political patron as well.62 The Ministry of Science and Technology was the overall coordinator.
As we’ve seen, the 2008 global financial crisis convinced many Chinese policymakers to give up modeling policies on the American market economy and boosted their confidence in the advantages of socialism, which Wen Jiabao described as “efficient decision-making, a powerful organization, and the concentrated power to accomplish big things.”63 Wen observed that all through history, “major crises like the global financial crisis were followed by major technological breakthroughs,” and the successful economies were those that mastered the revolutionary technologies.64 In 2010, he launched a second wave of industrial policy, the “strategic emerging industries” that identified seven industrial sectors comprising thirty-five subsectors. The massive stimulus that helped China’s economy recover in record time flowed both to these emerging industries and the traditional state factories producing the steel, aluminum, and concrete for infrastructure construction. A leading reform economist criticized what he saw as the misallocation of investment: “All the talk about jobs is really lip service. Heavy industry creates fewer jobs than light industry and services in the private sector.”
Meanwhile, “state-owned enterprises grew more politically influential and difficult to monitor.”65 The CCP Organization Department and the Politburo claimed the power to select the chairman, CEO, and Party secretary of the central state companies (no one seriously considered giving that authority to the board of directors, even in the joint stock companies listed on international stock markets). Many of the executives had close connections with the families of leading Party politicians. “The central SOEs are the eldest sons of the People’s Republic,” a Beijing economist said, quoting the first head of SASAC.66 A banking official saw SASAC becoming an obstacle to market reforms: “SASAC turned into a special interest group that was the owner, operator, regulator, and beneficiary of the state sector.”
Stepping back to look at the history of the Hu Jintao era, 2002 to 2012, we must conclude that CCP collective leadership was not just a failure but inevitably set China on the course it is on today. Despite its original intention to modernize governance to keep pace with Chinese society and economy, the diffusion of power at the top ended up allowing bureaucratic interest groups to drive foreign and domestic policy toward self-defeating overreach. Hu never constructed a reform coalition to help sustain the legal, media, and civil society progress he began in his first term that could have checked that overreach. By 2012, as Hu retired and handed the reins to Xi Jinping, the future of China’s peaceful rise looked uncertain, though I would argue that it had not yet been fatally undermined.
7
Strongman Rule
According to someone who knows him, Xi Jinping started his reign “feeling weak and illegitimate.” He worried that he had been chosen only because he was a “red princeling of the suitable age.” He no doubt suspected that his peers had selected him to be Hu Jintao’s successor in a straw poll in 2007 in large part because his father, Xi Zhongxun, had been a revered Long March revolutionary, Cultural Revolution martyr, and economic reformer. After all, Xi had lost Party elections in the past because other officials believed he was riding on his father’s coattails instead of his own abilities.
Xi Jinping had enjoyed a privileged childhood, living in the leadership compound of Zhongnanhai when his father was serving as vice-premier and Premier Zhou Enlai’s right-hand man. As noted earlier, Xi’s life got much harder after Mao purged his father in 1962 and sent him to manage a tractor factory in Luoyang. But after the Cultural Revolution when Deng Xiaoping rehabilitated Xi Zhongxun and assigned him to leadership positions in the southern province of Guangdong, he re-emerged as an economic reformer, founding the Special Economic Zones and transforming Guangdong into a globalized economic powerhouse.
