What a ride China has had in the past few months. The World Cup
finals, the Beijing Olympics win, the surprising rapprochement with the
US, the hosting of the APEC conference (with George W. Bush attending
despite waging war on terrorism) and last and most significantly,
accession to the World Trade Organisation.
China has gotten what it wished for, which begs the subtle doubled-edged
meaning this statement implies: is it for the better or worse?
Particularly, how will it affect the "opening" of media in China?
Media will only be a secondary beneficiary of WTO as the principal
sectors addressed were naturally export and import-related, such as
agriculture, manufacturing and textiles. Given the social and political
combustible potential of media, it was and is just too sensitive to
tinker with right now.
A recently-reported example underscores this hypersensitivity.
Supposedly, the Ministry of Foreign Trade and Economic Cooperation has
had the terms of the WTO agreement that affect insurance under 24-hour
top secret guard because it is fearful that the public's reaction to
disclosure of its contents would be rage.
But isn't this action - prospective damage control regarding the flow of
content over media - media sector-related? This is but one indication of
how nervous the central Government must be in trying to propel the
country forward without sinking the Chinese Communist Party's
superstructure in the process. Part of the ballast required to
successfully navigate the troubled waters ahead was to postpone media
issues.
Aside from any ideological or political considerations, this solution
seems compellingly practical. Timing in life is everything; however, the
timing of WTO accession, while arguably the best possible in the last
five decades, is still far from ideal. China has followed the
enlightened direction blessed by Deng Xiaoping and implemented by the
policies of Jiang Zemin, Zhu Rongji and other reformers. And it has been
rewarded with unprecedented economic growth. Attendant upon this is one
of history's greatest high-wire walks.
Notwithstanding great strides in GDP, in many ways the WTO step is
zero-sum; many will have to lose before all can benefit. The Government
is all too aware of the dark side of the huge population base, still the
largest on this planet, and its demographic characteristics.
From a media perspective, most of China's 1.3 billion people are no
longer in the dark. With 94 per cent TV penetration every night, some
350 million or more TV screens light up. About a billion are
farmer-peasants, employees of state-owned enterprises or among the
already unemployed, and their families. These segments are the ones that
are expected to suffer the most pain, at least in the short term, as a
result of WTO.
Even the middle class stratum will not escape the competitive stress of
many new foreign companies, more sophisticated, capitalised and with
long familiarity complying with international standards, breaking into
their previously-protected markets.
Under what cloud of optimistic delusion should anyone think that Beijing
would consider intranational augmentation of media dissemination to the
unemployed and the hungry, let alone its opening to the international
media community?At least intermittently, the media will be
tightly-managed to prevent the masses from experiencing any more of the
side effects of the bitter medicine WTO causes than is absolutely
necessary.
Zhou Enlai once characterised "China (as) an attractive piece of meat
coveted by ..." The coming sea change will be rough enough given the
backdrop of hundreds of millions of unhappy, and perhaps at times
unruly, people; and that economy must be kept at full throttle just to
keep the social dislocations from metastasising into revolutions; and,
hordes of carnivorous foreign firms eager to tear off a piece of
China.
Assuming this is the perception, should we reasonably expect that the
grip on information flow through media would be loosened short-term?
"WTO accession" are not magical words which will immediately transform
China's bureaucracy into a well-oiled machine capable of dealing with
the myriad legal, technical and procedural adjustments required. For a
long time to come the interface will be like "ducks talking to geese" -
a lot of conversation but no one understanding what the other is
saying.
Millions of bureaucrats will have to first learn a new mindset. They
must acquaint themselves, then understand, then modify, then implement,
then enforce thousands of laws, rules, regulations, customs and
practices.
A gargantuan task described by one mainland savant as a blind man riding
a blind horse.
Each of the above undertakings would in any other national context be
separately considered a daunting task, but China has to do all of them
at once. That is not all. The incumbent leadership will officially be
turning the Government over to a new regime by 2003. It is gainsaid that
President Jiang wants history's adulatory review to be assured by no
misstep occurring during the closing time of his rule.
Obviously, he wants to step down as a winner. Perhaps this is what Zhu
Rongji is also doing by retiring. One thing is for sure, neither he, his
heir apparent Hu Jintao, or Zhu want to see the boat rocked any more
than it has to be. Media must be their friend, not a potentially
disruptive threat.
In light of the above scenario, it is exceedingly rational, reasonable
and arguably imperative that the central Government will brace itself in
a defensive posture by maintaining the status quo regarding the
destabilising potentiality of media. This should be expected at least
until the new Government is well on its feet and the principal trading
changes, SOE restructuring and the unpleasant impositions of WTO
membership have lost their traumatic effect.
Media won't be liberalised or opened until it has to be. The last thing
the leadership wants during the coming period of adjustment is to have
tens or even hundreds of millions of desperate, disgruntled and
displaced citizens watching western TV programmes, showing high
standards of living, political freedoms and products they not only
cannot enjoy, but may never even dreamed existed.
The same fears cover print, radio, and of course, the internet. Last
month some 17,000 internet cafes were closed for failing to install
software to block objectionable content.
Yet all is not gloom and doom. While recent months have seen what some
industry observers conclude is a reactionary retrenchment, such as the
ultimatum to impose a unified satellite platform for foreign TV channels
into China, there have also been truly landmark steps taken toward
substantive progress.
Almost simultaneously China granted broadcast rights to CETV (AOL/Time
Warner) and Phoenix Satellite TV. These are the first true legal
licenses providing real and direct access to a domestic PRC audience.
Admittedly the licences are limited geographically and thereby
demographically to an attractive area of one of the most progressive
parts of China - the Pearl River Delta in Guangdong.
Another positive sign, which should not be occurring if the central
Government was really reactionary, is forming a super- committee to
reconcile friction between the Ministry of Information Technology and
the State Administration of Radio, Film and Television.
The importance of this is apparent because Zhu Rongji will head it.
Neither would it be a surprise to see a push at the State Council level
to exhort all ministries and branches, even media-related, to find ways
to commercially exploit, but not privatise, the asset bases of their
operating branches.
Into this unfamiliar exploration and restructuring to generate revenues
are opportunities for media players to become involved, or more
involved.
And the time is now. To the victor belongs the spoils; but to the
long-term strategic participants belongs the victory.
Further, the correlation of advertising expenditures to GDP growth is a
valid principle, and applicable to China. Adspend, currently in decline
in China, has lots of room to grow to catch up with developed
countries.
So, as the world's economy recovers, and if China can hit its targeted
annual growth of seven per cent GDP, the total ad pie between now and
the Beijing Olympics could grow significantly. This will nourish media
as a whole, and, when coupled with the global significance and impetus
of the 2008 Olympics to media, one should expect that media would see
meaningful "opening" reach China a few years ahead of the Olympic
torch.
The encouraging news is that it is the ideal time for media companies to
position themselves for the future. At a Beijing investor conference on
November 17, an investment banker was asked what three areas he thought
would be the best for investment in China. The first, he said, was
media; nothing to dispute there.
But the uphill ride of the past few months has been just the mechanical
pull up on the proverbial roller coaster.
China knows some hair-raising dips have yet to come and it is steeling
itself for them. So it won't embrace opening the media sector during the
ride; only when it is successfully over. And while the ride will take
several years, longer than many might like, there are reasons to remain
confident that the tracks will hold and bring the cars safely to their
planned destination.
The opposite is unthinkable.
