People’s Daily’s IPO Farce: Washing People’s Brain with People’s Money

The website of People’s Daily, the mouthpiece of the CCP, is now a listed company in the Shanghai Stock Exchange. The company raised 1.4 billion yuan (US$222.2 million) in its IPO, nearly three times the amount it hoped for. On the first day of its trading, its stock price surged 76%. Before People’s Daily’s IPO, some pro-democracy activists said that no citizen would buy the stock of a propaganda machine whose profit comes solely from government subsidy. But they couldn’t be more wrong.

Hu Xijin (胡锡进), the Chief Editor of Global Times and a shareholder of People’s Daily, proclaimed victoriously, “The strong performance of People’s Daily on the stock market clearly showed that the majority of Chinese people support our political system. People have voted with their own money.” Meanwhile, pro-democracy blogger Wu Yue San Ke (五岳散客) sadly reflected: “In our society most people are still willing to exchange democracy for monetary gains.”

I do find the retail investors’ enthusiasm over People’s Daily unnerving, only because it confirms my pessimistic view that many people are not against a repressive system as long as they have a chance to join the repressor side. But from an investor’s perspective, People’s Daily’s success is no surprise. The single most important lesson Chinese investors learned in the past several years is that you have to “Follow the Government”. People are buying People’s Daily only because they believe the government will not let it fail even if it means showering taxpayer money on it.

A Webpage of People.com.cn

Here are some facts about the website of People’s Daily that have been discovered by netizens so far:

  • It has certain monopolistic advantages in the heavily controlled news industry. For example, a Chinese journalist can only be acknowledged as a “professional journalist” after they received a “journalist license” from the government. Any journalistic investigation might be considered illegal if the journalist does not have the “journalist license”. None of the other Internet news portal has any journalist licenses, while People’s Daily has more than 120 ones.
  • The other Internet news portals, from Sina, Sohu to Tencent, are required to buy and publish news from People’s Daily. How many companies have such power over their competitors?
  • The biggest clients of People’s Daily are all government institutions who are not price sensitive at all.
  • It can generate profit even without income. For example, the People’s Search Engine, which is set up to compete with Google, has not been monetized at all, but already has more than 30 million yuan profit magically showing up in its book.
  • It plans to spend part of the money it raised on office equipment, namely iPhones and iPads, at the price of 10000 yuan each, several times the market price.

The successful IPO of the website of People’s Daily is a testament to the success of state capitalism in China. The bureaucrats working for People’s Daily must be celebrating: Who said the Internet or the market will undermine state authority? Now we have more money to buy luxury goods such as iPhones and LV or to fly first class to the US for business tour. And if we have some money left, we can spend it on educating people that democratic values are just Western imperialist ideology.

Related article: Red Pad, a Pad Tailor-Made for Government Officials

 

 

Niall Ferguson Warned about “Shrill Nationalism” in the Documentary “China: Triumph and Turmoil”

In the documentary China: Triumph and Turmoil, just aired in UK on Channel 4, Niall Ferguson stated that the Internet and China’s integration into global economy didn’t really spread democratic values in China, instead, they facilitated a growing “unofficial nationalism”, particularly among young Chinese.

Ferguson says, “It is one of our comforting and enduring myths that as China becomes more modern and sophisticated, more like us, it will come to adopt our values. I’m not sure it’s going to be like that. [Chinese students during the Lhasa riots in 2008] were very hostile to the criticism of the Chinese government. The key insight for me is that rather than pro-democracy feelings increasing as China grows economically, it is a radical, shrill nationalism that is emerging. There is an enthusiastic embrace of the economic benefits of the market but resentment of Western cultural hegemony. The attitude is: if we make it economically, we don’t have to kowtow to you culturally.”

There is plenty of China-phobia in the West right now and Ferguson’s discussion played right into it. In another interview, he even talked about the troubling parallel between today’s China and Germany before WWI, on the ground that both had “rapid economic growth, self-confidence and increasingly a rather shrill nationalism”.

I have been studying nationalism in China for years, and like Ferguson, I found the nationalist sentiment among young people very unnerving. But Ferguson certainly exaggerated the power and social influence of radical nationalists in China, maybe just to make his documentary more sensational.

Yes it is true that there are some young people who are forming online communities that circulate xenophobic discourses, some even organized hacker attacks, but there are also many Chinese NGOs and individuals who are using the Internet to initiate cross-cultural dialogues.

It is also true that the government is relying on nationalism as a main source of legitimacy, but some top leaders are aware of the danger that radical nationalism could destabilize Chinese society and ruin China’s relationship with the International community. That is why one of the most influential nationalist website, Utopia/乌有之乡, was shut down recently for its speeches that defend the Culture Revolution and criticize the government for being too soft in China’s disputes with Asian neighbors over resources in South China Sea.

Also, the power elites are too invested in the current system of state capitalism, which is dependent on the global market, that it will not risk a show-down with the West. Many of our leaders, including the recently indicted Bo Xilai, have been storing their wealth in the US, and their family members are already US citizens. Are there such things in Germany a hundred years ago?

Many of the nationalist young Chinese, despite their resistance to so called Western values, fully embraced individualism and consumerism. I interviewed some leaders in the nationalist community, and I noticed that they are very fond of iPhones and LV bags, and they are even hoping to use the money they made from publishing nationalistic books to emigrate to the West.

However, nationalism has indeed become the main obstacle for domestic reform. It has worked well as a justification for the current status quo and local injustice. For example, nationalism has been used to justify internet censorship on the ground of national sovereignty in the cyberspace; and it was used to defuse media exposure of social problems, with investigative journalists being labeled “traitors” and “guides of Western imperialists”.

Overall, I believe Chinese nationalism is a bigger threat to the democratization of China than to global stability. Few nationalists in China are actually shouting “let’s conquer the world”, but many are telling the repressed in China that “you don’t need those Western values such as democracy, freedom of speech, equality or human rights.

 

Internet PR Company Sued for Hiring Hackers

Recently in the court of Shanghai Qingpu district, an “Internet public relations” company was found guilty of violating the article on Computer System Security in China’s Criminal Law. What this company did was to force a website to delete negative records of its client by hiring a hacker to attack the website.

“Internet PR” is a thriving industry. What’s special about Chinese Internet PR companies is that they don’t just manage social media publicity like their Western peers, they also offer water army service, post deleting service, and even hacking service. I’ve written about how the water army can be your personal online mercenary and crowd out voices of your critics. But Internet PR companies can also delete negative information about you by bribing web-masters and editors. For example, during the poisonous milk crisis in 2008, milk companies hired PR companies to help them “persuade” the search engine Baidu and major web portals to delete posts and discussion threads about their polluted products.

These PR companies often act in a treacherous way: in the morning they take your order to spread negative news about your competitor, but in the afternoon they might already get paid by your competitors to delete those news, and at night they might be posting negative news about you if your competitor pays more. Some of them even make up negative news about a company themselves in order to get deals of “post deleting”.

But this indicted PR company crossed the line by hiring hackers to attack a website that would not collaborate with them. It accepted an order from an accounting company to erase its past record of fraud on the Internet. So it contacted websites that contain such record, but one of these websites simply refused to collaborate no matter what they offer. Then it decided to pressure the website by hiring a hacker, who is a young man in early 20s, to attack and shut down that website. But the people in this PR company have no idea that the owner of this website reported their attack to the police, nor did they realize that their behavior is a criminal offense.

This case is a good warning for me also. I always thought the cyberspace in China is a wild west where you can get away with murder, as long as you don’t criticize the government. I have been saving money for a campaign that will transform my online image into a young man with no past but many followers. But now I am worried. Would there be more constraint on the practices of the water army, post deleters, and hackers? How will China’s legal system adapt to the new media sphere?

Will Apple CEO Tim Cook Like Our Shanzhai Phones?

Apple CEO Tim Cook is visiting Beijing these days and meeting with Chinese officials. He even was spotted in the Apple Store in Beijing. But what my fellow netizens are curious about is how he likes our shanzhai(山寨) Phones.

I heard a story from a proud Shanzhai iPhone user: Tim Cook decided to try the subway in Beijing. And he was pleasantly surprised that the phones that most people were playing with on the train were iPhones. Then he noticed something even more surprising. One iPhone was running android, another was running symbian, and another even let the users choose from iOS, android, symbian and windows 7 in its menu!

Courtesy of Techweb China
Cook then noticed that a girl was opening the back cover of her iPhone, changing the battery. But Cook saw that her iPhone is holding 4 sim cards! Yes this is the legendary iPhone PS with built-in simultaneous dual-dual sim cards.

Courtesy of Techweb China
Apple had a partnership with China Unicom, but the iPhones bundled with China Unicom network are not selling well. My uncle, who is a peasant,
just got an iPhone for 600 RMB, while China Unicom is selling at 5888 RMB a piece.

Courtesy of TechWeb China
I’m a big iPhone fan also, but I’m not buying the iPhone 4s, I am waiting for an iPhone that I saw on the Internet, which can be worn on the wrist like a watch and has a built-in LED flash light!

Courtesy of Apple频道 中国

Chinese Netizen’s “Occupy Obama Movement” on Google Plus

Last night I heard from friends on Sina Weibo that Google Plus was unblocked and there is a Chinese carnival on Barack Obama’s G+ page, where we can do our favorite online activities such as 抢沙发 (”occupying sofa”-being the first in the comment roll ), and刷屏 (”swiping screen”-creating a sea of comments that flood the whole page). I immediately went to my G+ account, which I haven’t used since I opened it last year, and added Obama to my circle of “family”. Wow, under the first post I saw on Obama’s page dated Feb.24, 90% of the 500 comments are in Chinese, and a significant amount of the rest are in Chinglish. I have not seen a virtual party so wild since the April of 2010 when we climbed over the Great Firewall to follow the twitter of Aoi Sola (Japanese AV star).

BBC actually reported on this phenomenon already, but its misinterpretation of the Chinese comments has itself become a source of amusement for Chinese netizens. The BBC article says, “they talked about occupying the furniture and bringing snacks and soft drinks.” Obviously the reporters had no idea what “occupying sofa” means in Chinese Internet Language, which is the frontier of linguistic innovation. The folks at China Internet Watch tried to help out and explained:“occupying sofa” is a common behavior often in online forums trying to be the first to leave a comment or reply. Imagine many friends visit you at your house, the first ones arrived can take the sofa (which is more comfortable), those who are a bit late have to take the chairs, and the ones come last have only the floor to sit on”.

But most of my friends found the misunderstanding so funny that they excitedly gathered more people to occupy the Obama page and say more nonsense to further confuse the poor translators of Western media.

Anyway I feel that some of the Chinese comments are so good that they deserve good English translation. Here are some of my favorite comments:

-Good afternoon Mr. President, I just come here to chill.

-Don’t fight with me, this is the last available space! Advertisers interested in renting this space please contact me.

-How to tell if a girl is a virgin by looking at her thigh…

-The one above me is a very very bad person.

-People behind me, keep your line straight!

-For Sale, Canon 60D+17-55mm f2.8 Lense…

-Tour group from Huadong University blowing by.

-This is such a historical moment! Have you guys had dinner?

-Mr. President, I’d like to order some food. The people behind me will pay.

Continue reading

Star Microbloggers Making Impact and Money on Sina Weibo

Although Sina Weibo (微博), China’s top microblog network, is still not making any profit, the trend setters who have a large number of followers on Weibo already found some ways to monetize their online influence. Many celebrities on Weibo, from film stars to athletes to public intellectuals who already had many fans before they started microblogging, find Weibo a powerful site for self-promotion; but I am mainly studying the people whose social capital mostly comes from their work of microblogging itself.

My favorite example is Lao Rong (老榕), an experienced writer and Internet entrepreneur who has been active in China’s online forums, e-commerce sites and blogosphere since the late 90s. But what made him a superstar of microblogging in 2011 was his live reports on the Libya revolution. During the Libya revolution, Chinese netizens found that the stories they got from official media such as CCTV or Global Times were quite different from those from International news websites, and many of them were curious about what was really going on. Lao Rong actually went to Libya on his own expense as a citizen journalist and immersed himself in the rebelling Libyans in Benghazi. Netizens found the videos, photos and first-hand account on Lao Rong’s microblog much more trustworthy and lively than the reports from tradition media. So more than 3 million people started to follow Lao Rong on Sina Weibo.

Now Lao Rong is writing about the Syria crisis, but he is also making his microblog into a site of e-commerce. He is an expert of jade, so he posts pictures of jade collectibles and promote them to his followers. Since the value of a piece of jade is very difficult to determine even if it’s closely examined by an expert, only the mutual trust between Lao Rong and his virtual followers, which Lao Rong earned through his citizen journalism, can make it possible to trade jade on microblog. Lao Rong is also running a social enterprise, through which he helps poor communities in Xinjiang Uighur area to sell their agricultural products to residents in big cities. Without the promotion on his microblog, these agricultural products would have been left rotten in the field without ever reaching the urban customers.

But you don’t have to talk about international politics to become a star on Weibo; a microblog account named “Too Much Laughter will Get You Pregnant” (笑多了会怀孕)won close to 2 million followers by diligently aggregate and repost the most popular jokes, parodies, and tabloids on the Chinese Internet constantly. It introduces itself as a curator of erotic, cold, spicy and warm-hearted jokes. Meanwhile, it sends an open invitation to advertisers who are interested in purchasing promotional tweets from it. So every once a while on this microblog, in the mix of funny pictures and witty sayings, you would find a tweet giving out a coupon or promoting a product.  Continue reading

Observation of Public Discussion over Syria Crisis in China

Just two weeks after China and Russia vetoed the UN resolution condemning the bloody crackdown on protesters in Syria, China’s Ministry of Foreign Affair is now saying on its website that China supports the Arab League’s plan for ending the violence in Syria. Many netizens are saying that we are witnessing the same drama that happened during the Libya revolution, at that time China started with backing Qaddafi but quickly reversed the course when the opposition gained momentum. But it seems to me that Mr.Xi’s visit to the US played an important role in this change of position, and our next president Mr. Xi’s approach to foreign affairs seems to be more pragmatic than ideological. 

Replay of the Libya drama?
When the Libya revolution just broke out, the official media in China, from CCTV to Global Times, underplayed the libya people’s discontent, praised Qaddafi’s achievement in building a prosperous Libya, and condemned western interference. The grassroot nationalists cheered the government’s courage to stand up for “Libya” and against Western imperialists. But later when Qaddafi’s demise seemed inevitable, Chinese government mended relationship with the opposition, and official media started to praise libya people’s courage. The grassroot nationalists was caught by surprise, they found themselves in a difficult dilemma between criticizing the government for the inconsistency and acknowledging their own misunderstanding of the people of Libya. This time these nationalists anticipated the ambiguity of the government’s position, and many of them talked about protecting China’s economic interest in Syria, which basically means being ready to work with the opposition if they win.
“General Zhang’s Curse” 
Zhang Zhaozhong, a general from People’s Liberation Army and one of CCTV’s favorite commentators, said at the beginning of the Libya revolution that Qaddafi was an old friend of China, and the “people’s army” of Libya would not be defeated by Western imperialists. General Zhang also called North Korea’s dictator Kim Jong-il “an old friend of China” in another interview. So after the death of Qaddafi and Kim Jong-il, pro-democracy netizens invented the sarcastic phrase “General Zhang’s curse”, which means that if someone is praised by General Zhang, his life will be in severe danger. General Zhang appeared on TV again one week ago and voiced his support for the al-Assad government: “The well trained people’s army of Syria will not be defeated by Western imperialists”. So many netizens are joking “Assad, watch out! General Zhang said good things about you!”
CCTV vs Microblog
On Feb 18, Lao Rong (老榕), one of the most famous bloggers in China, posted on Sina Weibo that in Syria about 20,000 people were going to the street in big snow to join a memorial for the protesters who were slaughtered during the bloody crackdown by the Assad regime. CCTV also reported the same event, but its correspondent in Syria told the audience that only 200 people joined the memorial. Some people commented on Lao Rong’s post and accused him of spreading rumor. But soon there were so much video footage of the event on the Internet that CCTV’s version was easily discredited.
Western Media Correspondents in the Middle East are CIA agents?
I just read an outrageous post on Sina Weibo by a well-known nationalist named “lazy 1980″, which says that Marie Colvin, the American journalist who was just killed in Syria, is definitely a CIA agent.

Combining Social Media with E-Commerce, New Monetization Model for Sina Weibo

Yesterday (Feb 17) Sina Weibo (China’s leading microblog platform )and Ctrip (China’s leading online travel service provider) just announced their new collaboration through which you can find good hotel and flight deals from Ctrip by simply posting your travel requests on Sina Weibo (similar to Twits) then @Ctrip. I tried it by using my android phone to post shanghai+hotel@ctrip, within several seconds I got suggestion about hotels and links to webpages on Ctrip where I can read more and make reservation.

This collaboration obviously helps Ctrip to access the 250 million registered users of Sina Weibo and take advantage of microblog this intuitive and instant form of communication. There are already many companies that are using Sina Weibo as a major site of promotion and customer relationship. But I think Ctrip’s weibo campaign might prove to a transformative step for it to adapt to the new social media environment. Ctrip is still relying on its website and hotlines to conduct most of its business. And competitors such as qunar, which recently formed alliance with Baidu, are eroding Ctrip’s market share. The collaboration with Sina Weibo not only makes its service available to the growing mobile networked public, but also gives it a social element that it was lacking compared to companies such as Trip Advisor.

But I think this collaboration has even more important implications for Sina than for Ctrip. Sina Weibo is not monetized at all yet, but now we see a promising path of combining social media and e-commerce for it. ichinastock reported that “In China’s microblogging market, Sina Weibo accounts for 50% of active users and 85% of browsing time”. But many investors are skeptical about whether Sina Weibo can become a profitable business. Sina Weibo has opened a game platform, which has not been successful yet, and market researchers are saying that the main users of Sina are urban middle class who don’t spend much time on gaming. Sina also has tried to imitate QQ and issued a virtual currency called weibi, which can be used to purchase virtual items within Weibo community. But there isn’t much to buy on Weibo other than weibo accounts of lucky numbers. Continue reading

Protests against Bear Farms IPO and Western Imperialist Conspiracy

Bile Extracted from Live Bears

Gui Zhentang Pharmaceutical Company (归真堂), a company that specializes in bear farming and extracting bile from live bears, is applying for IPO on the Shenzhen Stock Exchange. The news was met with outrage all over social media in China. This company announced shocking plans to expand the number of bears they are torturing from 400 to 1200 with new capital raised through the IPO. So tens of thousands of netizens are petitioning the China Securities Regulatory Commission to disqualify this company from being listed on the stock market. But the Association of Traditional Chinese Medicine just published a statement on 2/7 saying that western imperialist interest groups are stirring up these protests against bear farms in order to undermine the traditional Chinese medicine industry and enhance the dominance of western medicine companies.

Bear bile is considered a precious ingredient in traditional Chinese medicine. Despite the fact that there are already synthetic alternatives that prove to have the same medical effects as bear bile, companies like Gui Zhentang still kept moon bears (an endangered species in cages, cut a hole in their stomach and stick a tube into their gall bladder to drain bile from them everyday. NGOs like Animal Asia and End Bear Farm have detailed documentation of such cruel practices on their websites. Continue reading

RedPad, a Pad Tailor-Made for Chinese Officials

 

RedPad, technology innovation from state capitalism

Can innovative entrepreneurship prosper in state capitalism? A Beijing company called Red Technology (红派科技) said “Yes” and announced its new product that aims to rival the influential iPad: the RedPad, a pad tailor-made for the Chinese government officials. The innovation of this RedPad does not lie in its hardware or software, it looks no different from other pads and runs on the Android system. What makes it stand out, according to Red Technology, is that it offers a unique information service that helps government officials to read the minds of top leaders of the central government and stay informed about public discussions online, also, it guarantees complete online privacy of its users. 


The RedPad sells at 9999 RMB each, twice as much as the price of iPad in China, though it offers a wholesale discounted price of 7100RMB to government institutions. Why would Red Technology think officials will pay such a hefty price for a copycat product? I think we should not under-estimate Red Technology’s ingenuity, at least, it has the profound insight that Chinese government officials live in a completely different world from common people, so of course the Internet means something completely different to them than to common people. The RedPad’s selling points indeed meet the specific demands of officials: to know what their superiors are thinking, and to control what their inferiors know and say about them. And high price is not an issue for people who are spending other people’s money. In RedPad, we see the kind of innovation that truly matters in China: Creative Ass-kissing, and the perfection of an established business model of state capitalism: privatization of public money.  Continue reading