China Offers Carrots in a News Era Too Quick for Sticks
(Bloomberg Gadfly) -- The stick doesn't seem to be working, so now China's waving carrots to bring the country's burgeoning media landscape into line.
The State Council and the Central Committee of the Communist Party of China plan to boost the development of online outlets by creating new media institutions and encouraging eligible websites to go public, the official Xinhua news agency reported Sunday, citing the nation's 13th five-year plan for cultural development and reform.
This plan includes a project to "build public opinion fronts" and intensify management control over search engines, instant messaging and news apps, it said.
While the government is reasserting its authority over information, the policy also looks like a bid to modernize the nation's news industry in a mobile-first environment.
China's internet landscape is already very modern, in many ways surpassing developed markets like the U.S. and Japan. And most of that development has been driven by non-government organizations, including the three majors, Baidu Inc., Alibaba Group Holding Ltd. and Tencent Holdings Ltd.
On the news front, aggregators Toutiao and Yidian Zixun are among the most-used news apps in China -- behind only Tencent's own offering, according to data from Quest Mobile and China Internet Watch. Recent funding puts Yidian Zixun's valuation at around $200 million, a figure that's been eclipsed by the $1.1 billion Toutiao raised, which CB Insights says gives it an $11 billion valuation.
Development by non-state players has left the government struggling to keep pace, forcing it to employ old tactics such as information crackdowns.
President Xi Jinping foresaw the risk and potential soon after taking office, gathering his propaganda team in August 2013 to impress on them the importance of the internet in driving the government agenda. “We need to make online public opinion the top priority in our propaganda work," Bloomberg News reported Xi as saying a year later, citing excerpts published on official websites.
Just as Xi's thoughts were being publicized, new regulations were introduced that were supposed to ban the use of pseudonyms on social media and force users to agree on a set of guidelines that largely mimicked the government's own propaganda goals, such as upholding the socialist system.
But this stick approach didn't last long: Just two years later, the Cyberspace Administration made clear that recycling of social media posts by online news outlets wouldn't stand, an admission that media outlets have adapted their news-gathering methods in ways the government hasn't been able to control.
What's interesting about this new five-year plan is that mainstream (read: old) media will be given support to develop their websites, with a push for both public and private investment in the industry.
Then there's the plan to help eligible websites IPO. That caveat will be an important one, and possibly the most powerful carrot of all.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Tim Culpan is a technology columnist for Bloomberg Gadfly. He previously covered technology for Bloomberg News.
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