Rebecca MacKinnon On China’s Internet White Paper. American Investors Should Pay Attention
Rebecca MacKinnon has written a must-read post on the Chinese government’s recently issued White Paper on the Internet in China. She provides the best explanation I have seen of the government’s approach to managing the Chinese Internet–”networked authoritarianism”. As Ms. MacKinnon writes:
China is pioneering what I call “networked authoritarianism.” Compared to classic authoritarianism, networked authoritarianism permits – or shall we say accepts the Internet’s inevitable consequences and adjusts – a lot more give-and-take between government and citizens than in a pre-Internet authoritarian state. While one party remains in control, a wide range of conversations about the country’s problems rage on websites and social networking services. The government follows online chatter, and sometimes people are even able to use the Internet to call attention to social problems or injustices, and even manage to have an impact on government policies. As a result, the average person with Internet or mobile access has a much greater sense of freedom – and may even feel like they have the ability to speak and be heard – in ways that weren’t possible under classic authoritarianism. It also makes most people a lot less likely to join a movement calling for radical political change. In many ways, the regime actually uses the Internet not only to extend its control but also to enhance its legitimacy.
At the same time, in the networked authoritarian state there is no guarantee of individual rights and freedoms. People go to jail when the powers-that-be decide they are too much of a threat – and there’s nothing anybody can do about it. Truly competitive, free and fair elections do not happen. The courts and the legal system are tools of the ruling party
Connecting every citizen in China to the Internet via multiple devices might sound like something the Chinese Communist Party would want to avoid. Several people who contacted me about China’s Internet White Paper were surprised at the Chinese government’s enthusiasm for connectivity. Such enthusiasm does not jive with most American and European notions of how an authoritarian state would be run by a party that calls itself Communist. What’s important to understand is that Chinese authoritarianism in the Internet age is not the same as the crumbling, centrally-planned authoritarianism of the Eastern Bloc, disconnected from the Western capitalist world.
The CCP leadership recognizes that they can’t control everybody all the time if they’re going to be a technologically advanced global economic powerhouse. What’s more, high Internet penetration is necessary if the Chinese government wants to continue high rates of economic growth, which economists agree requires boosting domestic consumer demand as well as pushing Chinese companies to the cutting edge of technological innovation. China catapulted itself to become the world’s second largest economy by turning itself into the world’s factory. But Chinese labor has grown expensive compared to some other markets in poorer countries. In order to stay competitive and keep growing, China needs to transition from a manufacturing-fueled economy to an economy fueled by domestic consumption at home, while being an innovator for advanced technologies and services that can compete with American and European companies.
She concludes her post with a passage that should trigger warning bells for American insitutional investors in Chinese Internet firms:
Note that many of the big Chinese companies receive American investment dollars or are publicly traded on U.S. stock exchanges, sending a clear message that whatever U.S. elected officials might say about “Internet freedom,” many American investors are quite happy to profit from China’s status quo.
So far no one campaigning for Internet freedom in China has linked investment in Chinese Internet firms to activism. But if someone with the stature and influence of Rebecca MacKinnon starts pushing this idea many institutional funds and their limited partners, which include large pension funds and university endowments, could find themselves in an uncomfortable spotlight.
Please tell me what you think in the comments.
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Those funds and endowments would be on the wrong side of things if they sought to choke off funding from U.S. institutional investors. I firmly believe that the more money goes to China's Internet companies — money for increasing bandwidth, for increasing marketing efforts and acquiring users, for building more and more attractive services — the more politically potent the Internet becomes, and the more it's able to outpace the technology and policy of control.
Superb post, Bill.
Along with Kaiser, I agree that compelling US institutional investors to divest from China's Internet would likely leave American investors – including public employees and their pensions – poorer with little or no damage to China's Internet companies or to China's increasingly effective network authoritarianism. Thinking we can provoke change by withholding our capital is an empty conceit at a time when China is questioning the role of and continued need for foreign investment of any sort. Driving some sort of “Divest from Online China” bandwagon would be an unfortunate waste of Rebecca's hard-won influence.
I may be reading too much into what she wrote. It seemed like an
interesting point with which to end the post, but there is no evidence
that she is suggesting any course of action. But by pointing it out we
may see other people start to push this idea, as counterproductive as
I think we agree it would likely be.
Good post, and thanks for highlighting Rebecca's post as a must read. I agree with your point that the concept of “networked authoritarianism” is spot on for several reasons. It connotes the multi-layered and distributed nature of “franchise authoritarianism” where license-holders are asked to enforce censorship rules and information control in a distributed manner. It also connotes the actual networked IT of mobile and internet that is where communications policies are being enforced, and where public opinion is being formed.
One other point. I'm interested in how “networked authoritarianism” is mirrored in other aspects of Chinese governance. My sense is that oversight of the internet, which we Western observers
are all obsessed with, is consistent with a set of themes that are mirrored in other arenas. For example, to pick another area that you're interested in, how is the use of land governed in China among central, provincial, and municipal authorities? How does popular opinion influence and affect issues like land use and government policies? Anyway, my thoughts on this are not fully baked, just think that what Rebecca is describing is probably consistent with a broader understanding of how China is governed…
[...] in China. Is Beijing trying to stuff the Internet genie back in its proverbial bottle, or is Rebecca MacKinnon right with her metaphor of an expanded aviary: the birdcage may be tighter knit, but it is still bigger than ever [...]
[...] in China. Is Beijing trying to stuff the Internet genie back in its proverbial bottle, or is Rebecca MacKinnon right with her metaphor of an expanded aviary: the birdcage may be tighter knit, but it is still bigger than ever [...]