new door for Rupert Murdoch

internet - Welcome to the snake pit, Rupert

Danwei welcomes media tycoon Rupert Murdoch into the Chinese "snake pit" of the new media. Murdoch has been flirting with the new media for some time and sees in it a way to enter China, after so many other media ventures in the Middle Kingdom failed.
While interesting, the media reports lack any substantial information on how this strategy might work. Well, you have to be careful when entering a snake pit, that is true.

internet - ESWN: Blogging for social transformation

Rebecca MacKinnon met Roland Soong, the author of the famous ESWN-blog, at the Fourth Annual Chinese Internet Conference in Singapore (but was not very present at the internet till now).

He points out that Western coverage of China - even at its best - is spotty and driven by the interests and attention spans of far-away editors. Thanks to an un-demanding job which leaves him with a decent income and plenty of free time, Roland has dedicated himself to serving a very important cause: helping the English-speaking world understand the Chinese world better by filling in the gaping information gaps not filled by professional media organizations. Every day Roland translates huge amounts of material from Chinese-language news websites, BBS chatrooms, blogs, and other sources.

Social transformation is the goal Roland wants to achieve by translating all this material. Is that working out? Rebecca says ESWN gave the inspiration for Global Voices Online.

I hope that his well-documented success in influencing the media will inspire even more people to wield the power of online citizens media.

Update: Here is ESWN's own presentation in Singapore.

economy - Cooling down effort no. X

In a new effort the central bank, the People's Bank of China, has increased on Friday the reserve requirements 0.5 percent for banks in a desparete effort to take capital out of its overheated markets, write many media.
When banks comply with the new regulations bij August 15 as required, it might take the equivalent of 16-17 billion euro out of the market, experts estimate. In July the bank made a similar move and more tightening of the capital market is expected later this year.
The economy grew in the second quarter of this year with a record 10.3 percent.

toys for remote sex

internet - Youth League against cyber toys

The Communist Youth Leages has turned against cyber tools for remote sex, the always alert Asiapundit read in Asian Sirens.
While first hailed as the decent solution for couples who are living remote from each other, the Communist Youth League now thinks it might a useful against Aids, but certainly not ok for "the welfare of the majority".
As if it should be compulsory teaching at schools. I do not see what the majority should have to do with this.

internet - Amnesty takes on Yahoo, Google, Microsoft

Rebecca points me in the direction of this report by Amnesty International (a pdf-file), focusing on the involvement of Yahoo, Google and Microsoft in the way China tries to censor the internet.
Initial media reports raised my fear this would be yet another exercise in moral indignation by paid activists, who are sitting in comfortable offices far away from China.
I just went over the report, and I must say the report goes far beyond that rather unproductive moral indignation. Its suggested list of standards for IT-companies that work in China offers a good basis to give this whole discussion a more realistic foundation. Worth a solid discussion.

internet - BBC World reports on the firewall

The BBC summerizes some viewpoints of more famous internet users on how they see the internet in China. A few quotes:

Filmmaker Hu Ge:

In the past, if you were a song writer, a novelist, a film maker or a painter, you must have a deal with a TV station, a film company or a publisher.
With the internet, nowadays people can by-pass these traditional organizations and upload their works directly and pass your work directly to your audience.

Dissident writer Liu Xiaobo:

The internet is the best gift god could send to China for the people of China to claim their rights.

Media: the end is near – the WTO column

(later also at Chinabiz)
The story that China’s traditional media are in a bad shape is not new, and I have been writing about this more often. But recent surfaced details on the state of the traditional media have even beaten my most gloomy predictions.

According to a recent survey by China’s domestic search engine Baidu online starlets are dominating its top-10 of most famous people in China. Former hits on those lists like former leader Mao Zedong and filmmaker Zhang Yimou have fallen to the 9th and 10th place, giving way to the internet stars of today, as internet-watcher Sam Flemming notes. The internet is replacing the traditional media as a way to format society.
Of course, you might argue, Baidu is an internet company and might have a strong bias in favor of the internet. Like cooking the books is nothing really new, making up top-10’s without having even a quasi-scientific basis is nothing new.
But the traditional media are also capable of going down the gutter without the help of the internet.

Declining readership and melting audiences for traditional media is not a unique Chinese feature. Media worldwide are on this slippery slope downhill for decades. But the Chinese market has shown a few trends that would go against that worldwide trend of decline, at least until recently.
First, ad revenue in China has exploded over the past fifteen years, making the media industry into some of the more profitable worldwide. Chinese media started off from zero, so achieving high growth was initially not so hard. Later, one China-hype after the other made advertisers blind for the sad truth. Certified audits for the circulation of print media have never existed and TV-ratings are sloppy at best. Earlier this year the TV-rating agency AC Nielsen announced it wanted to expand its current number of Chinese households it was monitoring. How many households do they monitor for their TV-ratings in the whole of China? Three hundred! I’m not much of a statistician but more qualified people fell into a fit when they heard that number.
That bizarre situation has led to a market where papers and magazine are sold for less than the price of the paper they are printed on.
Secondly, most Chinese media have become lazy because of the comfort they have been used to. When they moved away from becoming exclusive governmental announcers they did not look for an audience to serve, at best they wanted to serve the advertisers. That might be understandable, since those advertisers provided their main source of revenue, but it is causing a crisis now the media actually would need their audiences to survive.
Of course, the Chinese media are also restricted by governmental restraints on what they can publish and what not, but the efforts to really provide a service to their audiences have been scarce at best.

Since last year, the ad revenues of the traditional media have come into a free fall. In an effort to catch up with the steady decline of Western media, their downturn seems rather dramatic after a few decades of unrestricted growth. In 2005 ad revenue growth for daily papers declined for the first time and caused a panic. Shocking details about their declining reach have showed up in tandem.
Even the China Daily spelled out recently how little traditional media still mean for the urbanites where they were so popular.

Personally, I’m betting on the online media. Not because they are better, they are not even the main reason for the current decline of the traditional media. The basis of the way media are produced have changed dramatically worldwide. In China, because of very specific conditions, it took a bit longer to discover that mass media are lacking the economic rational they had in the past. Still much of the old power and capital is there, but it will need a magician to let them survive from the current crisis.

Fons Tuinstra

telecom - China Mobile subscribes record numbers ahead of 3G-licenses

China Mobile, China's and the world's largest mobile phone service, reports it has added 4.44 million subscribers last Month, creating a customer base of 273.8 million, Bloomberg reports. It was the fastest growth ever, since the company started three months ago a growth spurt.
Reduced fees in Beijing are part of the explanation for the new spike in growth, while competition has slowed down. Nokia and Motorola are the main beneficiaries among the mobile phone makers, says Bloomberg.
The upsurge comes ahead of the long awaited issuance of 3G-licenses that will trigger off and new age in China's mobile communication. The country's largest mobile phone provider is creating itself a headstart when it might get one of those much-sought licenses.

media - Warner Bros tries to beat the pirates

Hollywood giant Warner Bros it trying to do it alright for the first time in China. According to Reuters they will release their blockbuster movie "Crazy Stone" for 10 Renminbi only twelve days after its release in the Chinese cinema's.
That is probably not enough to really beat the pirates, who can do it 20 percent cheaper in retail and before the official release. But it is the best try I have seen up to now to beat the Chinese pirates. Could be a nice movie too.

internet - China has 123 million internet users: CNICC

Bean counters can start adjusting their data base again. According to the CNICC, the official statistics provider of the internet, China has now 123 million internet users, reports AFP, up 19.4 percent compared with June 2005. A majority of 77 million has broadband connections.
The 6-monthly report always brings more interesting tidbits, although also others do some analysis of the figures. The people's Daily reports that two third of those making online purchases are male. Listen to me: that is not going to stay like that. One thing is for sure: e-commerce is still in a very early phase:

About 80 percent of sellers use taobao.com and 34.5 percent use eBay. Nearly half of the on-line stores have daily transactions of below 10 yuan.
"It means most of the C2C (customer to customer) sellers do not regard on-line selling as their full-time business," said [analyst] Chi.

books - Revisisted: the China collapsing story

As my regular readers might know, I'm fascinated by the ongoing story that China is collapsing. In short, I think that by reinventing itself profoundly, the China of today is so different from the China of 15 years ago, any legitime theory to support such a collapse has been traded for new ones. And as long as change takes place in the current speed, China will be reinvented in ten years again, just as the Communist Party will have been, a party that is already for decades only communist in name.
Fortunately, one of my favorite doomsday thinkers, Gordon Chang, is sticking to his guns, at least partially, Asiapundit discovered. He now at least does not see China as a country fall apart anymore, but I do not agree with the Taiwanese author's assesment on Taiwan ("I don’t think China will fragment, but I do see Taiwan becoming recognized as the independent state that it actually is today"). I also disagree with his prediction on the communist party ("I don’t believe that the communist party will be ruling China very much longer. I think it will fall from power by the end of this decade.")
I have heard these predictions just a few times too often. Things cannot remain the same, that is for sure, but when you look at the past 15 years, there is no reason that would trigger off a massive collapse but rather an ongoing massive change.

internet - After China now India blocks weblogs

Andrew Lih points at the India vs. China debate, now the pro-free-speech Indian government is following the Chinese example by blocking some of the most popular weblogs. Of course, he teaches our Indian fellows how to jump the governmental firewall.
I have not seen an explanation for this Indian move, will try to follow this discussion too.

Update: Asiapundit goes into more detail. The fight against terrorism seems to have been triggered of the Indian block of weblogs. That means for sure they are losing the struggle.

No. 2

internet - Online stars dominate the top-10

Sam Flemming analyses the upsurge of online stars who are replacing very fast their offline competitors, like Mao Zedong (No.9) and Zhang Yimou (no.10).
Sam:

Consumers are taking control of their own entertainment. No more spoon fed, boring shows from traditional media. These are stars chosen by the people for the people. Certainly, net stars are not unique to China (think Star Wars Kid and the star making power of Youtube in the West, i.e. see here). However, I think net stars are much more mainstream in China than the West. Ask the average white collar worker in the US if they know the Star Wars Kid, they probably won't. Ask a Chinese white collar worker if they know Back Dorm Boys or Fu Rong Jie Jie, they most likely will.

media - The losing print market

Readers of this weblog might have noticed that I have been pointing at the fast declining influence of Chinese traditional media, partly due to the emergence of the internet, but also because Chinese have better things to do than read, watch those boring media.
A piece by the China Daily comes up with interesting details, supporting this case. (Fortunately, Danwei still finds the time to struggle through their stuff).

Newspaper ads sales fell by 5.1 per cent in 2004, and by 16.5 per cent in magazines compared with an average growth of 20 per cent in the previous 20 years. These figures are from The Blue Book of China's Media by Tsinghua professor Cui Baoguo. "Cui estimates that the ad sales of China's major newspapers in the first half of 2005 dropped by an average of more than 15 per cent year-on-year."

Getting back a bit

Have been traveling a bit, so posting has been slow. A heatwave is hitting Europe and that is not only slowing down people, it causes the internet connection also to slow down. Have put the modems in the fridge but not sure it will work.

economy - Slow-down efforts fail again: Bloomberg

Effort by the central government to slow down China's economic growth seem to have failed again, writes Bloomberg today. Gross domestic product has jumped again 10.4 percent over the second quarter, compared to a year ago, according to a survey among economists.
Figures will be released later tomorrow.

Measures taken so far ``are like taking a spoonful of water from an overflowing swimming pool,'' said Tao Dong, chief Asia economist at Credit Suisse Group in Hong Kong. ``China's currency needs to appreciate substantially."
A soaring trade surplus has flooded the economy with cash, providing companies with cheap funding for investment projects. Surplus capacity may cause prices and corporate profits to drop, increasing bad loans at banks and potentially causing a sharp slowdown in the world's fastest-growing major economy, the World Bank says.

Update: Well, it was 11,3 percent for the second quarter, a new record growth in a decade, says Bloomberg today.

China Mobile is not yet a pudding – the WTO-column

(Later also at Chinabiz)
“The eating is the proof of the pudding”, is a British saying. It says much about the British pudding, which can look horrible but taste delicious.
Deng Xiaoping had a variation: “I do not care whether the cat is black or white, as long as she catches mice”.

According to both sayings China Mobile has failed miserably in the past few weeks. First, it failed to take over Millicom International after lengthy negotiations, and many beans have been spilled already over that failure.
Second, it has been screwing up its domestic suppliers in a way that is unfortunately enough not unprecedented. By first not announcing a change in its suppliers contract, but by simply not prolonging them, China Mobile behaved like a monopolist – and of course, it is a virtual monopolist in mobile communication.
As we know, being screwed over is not a privilege of foreign companies in China, Chinese companies do get the honor too. And more often: Chinese companies also get screwed by foreign companies. It this not just a case of bad management, where possible cultural differences are just used as a smokescreen?
Especially in the case of Millicom much has been said about possible cultural clashes between the Chinese way of managing a company and the MBA-taught Western way. Many of my fellow-columnists at Chinabiz have regularly been praising Chinese companies in the way they changed themselves, in the way they have improved their management style.

That still might be true on a comfortable abstract level, when you are teaching and training those eager top- and middle-managers who genuinely want to change. But when China Mobile, one of China’s largest companies according to many ways of counting, does not taste like a pudding, is unable to catch mice, what is that assessment worth then? And more: what does it need to get changed?

I can only recall the drastic measures former Prime Minister Zhu Rongji took to kill off the corporate monster that carried at that time the name China Telecom in the second half of the 1990s. China Telecom did whatever it wanted as a state in the state, paying tribute to the official policies of moving China ahead, but behaving otherwise as a bureaucratic monster, avoiding every possible real challenge.
Zhu Rongji then took on one of his major fights: the split of China Telecom, first into four functional companies, including China Mobile. Then the remainder of China Telecom was split in a northern and southern section, to make sure the old monster was really dead.
But some monsters only multiply when their head is chopped off. Perhaps Zhu Rongji did a great job, but it looks like the work has not been properly finished.

Fons Tuinstra

telecom - The why's of China Mobile's international debacle

The International Herald Tribune chews over the latest failure by Chinese companies to close a high end international acquisition.

"We are talking about a culture of doing business that has been learned over many centuries," said Jay Berry, a professor of business studies in China at Jilin University-Lambton College and a former McKinsey consultant.
Chinese companies are "absolutely" slower than their foreign counterparts to do deals, Berry said. "They are much absorbed by internal problems, tied to the wrong products, fragmented, unprofitable, uncompetitive, highly political and drowning in debt," he said.

Not that much new things, but always nice to get a decent overview.