In the largest purge since taking down Covid-19, China has recently embarked on multi-faceted regulatory repression in many industries, which has generated much uncertainty. This can be interpreted as a way in which the Chinese Communist Party (CCP) under President Xi Jinping reminds tech giants and other big businesses that are on the right track.
According to Chinese observer and Deter author Tiff Roberts, “Beijing is seeking to strengthen its control over private companies and foreign investment” by retaining shares in key sectors such as home semiconductors and increasing the role of state-owned companies. More importantly, regulators also appear to be concerned that the younger population is moving off the “patriotic path” under the influence of foreign-controlled online media.
President Xi Jinping defined the rules of conduct when using cyberspace for the computerization process in February 2014 in his speech to the Central Cybersecurity and Information Technology Group (CCSIG). He said, “The Internet is not a place outside the law. Using the Internet to promote the overthrow of state power, incite religious extremism, promote national separatism, incite violent terrorist activity, etc., such behavior must be decisively stopped and broken, and must not be allowed to prevail. “
He added that the use of the internet for fraudulent activities, disseminating pornographic material, carrying out personal attacks, trafficking in illegal items, etc. must be “strongly controlled” and must not dominate. This would indicate that information arming has always been part of the CCP’s agenda.
At the same meeting, Jinping called core Internet technology “our greatest hidden threat as core technology is being constrained by others.” He compared any internet company that relies heavily on foreign countries to core components that rely heavily on other countries where the lifebuoy of the supply chain is in the hands of others. That said, it was like building a house on someone else’s wall, no matter how big and beautiful it was. He may not be able to withstand wind and rain and may even be vulnerable. He said that “if we want to seize the initiative in the development of the Internet in our country and ensure Internet safety and national security, we must overcome the main technological problem and strive to achieve” ahead of the curve “in certain areas and aspects.
A few days ago, Yahoo Inc. withdrew from China, citing an increasingly demanding operating environment. In a statement, the ISP said: “In recognition of the increasingly demanding business and legal environment in China, Yahoo’s service package will no longer be available from mainland China on November 1.” Yahoo’s withdrawal is largely symbolic as Chinese digital censorship has already blocked many of its services.
The entertainment industry in China has been asked to avoid artists with “misguided political positions”, strictly enforce wage limits for actors and cultivate a “patriotic atmosphere” for the industry. This is part of the state’s effort to crush the culture of celebrity fans. Already, the sale of goods to fans has been banned.
Gaming companies have also faced the wrath of regulators who have imposed restrictions on the amount of time players under the age of 18 can spend online gaming on weekends and holidays to reduce their addiction to gaming.
China has already started tightening up regulations for large IT technology companies. Last year, she halted the planned last minute IPO of Ant Group, a giant internet finance firm in New York City. Rules are now being introduced prohibiting internet companies whose data pose a potential risk of listing outside of the country.
Cloud computing also faces uncertainty as China is building its own state-backed cloud system that could challenge tech giants like Alibaba, Huawei and Tencent Holdings. The state is also trying to tighten up oversight of the algorithms that tech companies, including e-commerce companies and social media platforms, use to attack users. China’s Cyberspace Administration said companies must adhere to business ethics and integrity, and should create algorithm models that don’t encourage users to spend large amounts.
The Chinese government has also introduced legislation that prohibits private tutoring companies from raising capital abroad. The rules say that tutoring centers must register as non-profit companies. Now they will not offer subjects taught in public schools; it is forbidden to conduct classes on weekends and public holidays. China has a highly competitive education system like India; thanks to this, tutoring services have become popular among parents.
The banking sector has issued regulations tightening the control of online loans by financial companies. China’s Cyberspace Administration has asked Didi Chuxing, a leading shipping company, to stop accepting new users after it debuted on the New York Stock Exchange last June. Financial regulators have already restricted the cryptocurrency sector by banning banks and online payment companies from using cryptocurrencies. Provincial governments have also banned the use of cryptocurrency. The government is also addressing the real estate management sector to improve order. Actions are taken to reduce rampant indebtedness in the real estate sector; limits were imposed on development loans and real estate loans by banks.
In this troubled environment, we can expect China to tighten its scrutiny of the media, both domestically and internationally. Last March, a report by China’s Club of Foreign Correspondents (FCCC) said China had taken anti-coronavirus measures, intimidation and visa restrictions to curb foreign reporting in 2020, which ushered in “a sharp decline in media freedom.” The FCCC’s annual report states that in the 150 responses it received for the third consecutive year, no journalist said working conditions had improved. The report said: “All arms of state power, including surveillance systems put in place to contain the coronavirus, were used to harass and intimidate journalists, their Chinese colleagues and those with whom the foreign press wanted to interview.
Beijing BBC correspondent John Sudworth reported that in addition to the stringent restrictions imposed on foreign journalists trying to tell the truth about its remote western regions of Xinjiang, China has adopted a new tactic of labeling independent reports as “fake news.” He told about his own experience of being intimidated by unidentified persons while traveling along the desert highways of Xinjiang. They forced them to leave one city, driving them out of restaurants and shops, ordering the owners not to serve them. Their report of thousands of Uighurs and other minorities forced to harvest cotton based on China’s own political documents was labeled “fake news” by the Chinese Communist Party-led media.
On the other hand, the results of a global poll conducted by the International Federation of Journalists (IFJ) of its affiliated unions showed that China used the Covid-19 pandemic to strengthen its image in the world media. More than half of the countries surveyed in 2020 said coverage with China in their domestic media had been more positive since the start of the pandemic. The Chinese have probably adopted a more interventionist approach to information about China in the local media.
The report also found that more than 80% of countries are concerned about disinformation in the national media, although only a third of them say China is responsible.
The report said that as the pandemic began to spread, China launched the existing media infrastructure it had placed around the world to seek positive narratives about China in the national media and used novel tactics such as disinformation. This is not surprising as over the past two decades, China has transformed the global environment to expand its own share of state news services in tandem with its growing global reach.
According to the IFJ, China appears to have increased its own national and international news offering tailored to each country in non-English languages. This is significant as the international media struggled to survive due to the adverse economic fall of the Covid-19 pandemic.
We can expect China’s media strategy to flourish in both domestic and international media, making it difficult to separate real news from fake news as it is a weapon for the media. The most recent example is a report in the Financial Times that China tested a nuclear-capable supersonic missile last August. He said the weapon “circled the globe before accelerating towards the target.” However, China denied the report and said it was an experimental spacecraft, not a weapon.
The Financial Times report cites “five people familiar with the test” to say that the rocket carrying a supersonic gliding vehicle in low space orbit passed its target by “about twenty miles.” The report said the test showed China had made “astonishing progress” and wondered why the US often underestimated China’s military modernization. Whether China actually conducted a supersonic missile test or not, the report deepened global paranoia about China’s capabilities as the supersonic missile could penetrate the anti-missile shield.
—The writer is a retired South Asian military intelligence specialist associated with the Chennai Center for China Studies