China; Confronting the internet

China has taken a home grown approach to the internet, which means for major internet firms, there is a gaping hole in the world wide web.

The London Economic

By Jack Peat, Editor of The London Economic 

Yahoo today withdrew its services from China following the closure of its email service last month. Along with Twitter, Facebook and YouTube it will become yet another Western firm with internet blackout in the Communist state, demonstrating that for Silicon’s major tech firms, there is a gaping hole in the world wide web.

Deng Xiaoping, a reformist leader of the Communist Party of China said in the early 1980s: “If you open the window for fresh air, you have to expect some flies to blow in.” China’s evolution into a socialist market economy has been underpinned by the political ideology that “swatting flies” of new networks beyond the control of the party is better than embracing new movements per se. But the internet cannot be ignored, and in confronting the web, The Communist Party of China (CPC) has created a fascinating ‘mirror state’ which satisfies local demand but is impenetrable to overseas firms.

Social media and censorship: The Great Firewall of China

Six out of the top ten biggest media properties in the world (by penetration on active users) are Chinese social media sites. China had 538 million Internet users by the end of June 2012 and it is projected that its Internet population will hit 718 million by 2013, accounting for 52.7 per cent of the total population. Western social media sites may be banned but in their place Sina Weibo (Twitter), Youku Tudou (YouTube) and RenRen (Facebook) do the same job, only created in China, and thus under the watchful eye of the authorities.

The Great Firewall of China (The Golden Shield Project) is a censorship and surveillance project operated by the Ministry of Public Security (MPS). Echoing George Orwell’s Nineteen Eighty Four and to some extent (rather ironically) the US and European PRISM programme, it was initiated in 1998 and began operations in November 2003 with a remit of discouraging individuals to use the internet to “harm national security; disclose state secrets; or injure the interests of the state or society”.

Social media sites are a hub of information sharing and personalised interconnectivity, and are thus the biggest threat to what The Golden Shield is trying to protect. By blocking foreign social networking sites and forcing their citizens to use alternatives, China is able to control the flow of online information by censoring posts on sites within their jurisdiction. Although Sina Weibo recently contended with the idea of external authentication via Facebook, several personal attempts to log into the site using this method quickly reveal it is a clearly flawed PR stunt.

What is particularly interesting is how the Chinese government has managed to entertain the online demands of more than half a billion people without creating the internet equivalent of Tiananmen Square. In a remarkable evolution of socialist market ideology, CPC has opened the window to the internet by replicating online markets, but kept the room fly-free by using Chinese companies which fall under the watchful eye of the government.

Online consumer market and communism

China’s ecommerce market is set to leapfrog the US this year to become the world’s largest by total customer spending. In the same ilk as the social media market online growth has been driven by domestic companies rather than Silicon’s established global corporates, but consumers are in no way deprived of services we enjoy in the West, they simply receive them in re-branded and more centrally controlled packages.

Alibaba is China’s biggest ecommerce group, handling 1.1 trillion yuan ($170 billion) in sales in 2012, more than eBay and Amazon combined. Its consumer-to-consumer portal Taobao, similar to American eBay, features nearly a billion products and is one of the 20 most-visited websites globally. Amazon.com’s replica, JD.com, has grown to become China’s largest online company that sells directly to consumers, with 100 million registered users, five million orders a day and a whopping 60 billion yuan in sales ($10 billion) in 2012. Both sites enjoy a remarkably similar share of the online market to eBay and Amazon, playing very similar roles.

Censoring by replicating

Like social media, ecommerce censorship in China hasn’t been about strangling the market, but rather creating a personalised ecosystem within the grasp of the government. In many ways, this is the most elaborate and effective forms of censorship as consumers don’t feel deprived of anything and therefore have no desire to break from the shackles of control. But that doesn’t make it any less dangerous or more effective as a means of governance. There may be a gaping hole in the web now, but censorship will not be able to prevent the world-wide nature of the internet indefinitely.

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