By Michal Meidan, China analyst, Eurasia Group
China’s new leadership must be extremely jittery if reports that domestic hackers attacked prominent Western news outlets are accurate. Such attempts to control the flow of information and dominate the narrative about China will only lead to social tension domestically and unnerve foreign investors.
The year of the Dragon—which ends this weekend, when the Year of the Snake begins—has been a trying year for Beijing. In 2012, Chinese and foreign media aired the Communist Party’s dirty laundry, unearthing the most gruesome details of the Bo Xilai scandal and exposing Chinese elites’ unseemly wealth, just as Beijing was undergoing a complicated leadership transition. Constantly being one step behind the blogosphere and the media has been unsettling for officials who desperately want to control the flow of information.
A Domestic Problem
It is clear to see why they want do so. China’s expanding middle class is demanding greater accountability on issues ranging from land seizures and shoddy construction to tainted food and choking pollution that are now reported with greater frequency and detail. Such problems are likely related to endemic corruption and to the power of vested interests, and can only be seriously tackled through transparency and a more liberal attitude toward the flow of information. Tough rhetoric from the incoming leadership on the need to fight corruption has sparked hopes that the regime will become more accountable for its actions, and that the accumulation of wealth, power, and privileges will not be the purview of a select few.
But so far Beijing’s actions have not matched its rhetoric and instead, it has reverted to old habits: It has doubled down and clamped down on information control, a response that is at odds with the goals and aspirations of the Chinese middle class. The signs of stress are increasingly visible. In early January, heavy-handed controls of the Chinese press led to strikes at China’s most liberal and independent newspaper, Southern Weekend. Allegations that Chinese hackers are attacking foreign media outlets such as the New York Times and the Wall Street Journal, presumably in order to monitor coverage of the country, suggest extreme attempts to frame and shape the discourse about China both within its borders and beyond.
Increasing Social Discontent
Such a reactionary approach to information and political change will only exacerbate state-society tensions. This, in turn, will unnerve foreign investors who will operate amid more social discontent in China as the government’s attempts to engineer economic growth can no longer distract from other grievances. Second, a tightening of the Great Firewall could complicate operations for global businesses accustomed to operating in a 21st century high information environment. Third, the rise of sophisticated Chinese hackers will generate concerns in the business community about its ability to protect intellectual property and trade secrets. And as cyber security makes its way up the U.S.-China agenda, diplomatic ties between the world’s two biggest economies will face additional strains. Finally, the government may let some information flow freely: The nationalistic cries from the Chinese blogosphere demanding tougher action against China’s neighbors and bolder stances on maritime disputes.
China’s uneasy relationship with information could very well deteriorate into an array of domestic and international challenges in the Year of the Snake. But maybe there is still hope that some of the Snake’s reputed attributes—wisdom, intelligence, and self-control—will gradually begin to define Beijing’s approach to information control both within and outside of its borders.
Michal Meidan is an analyst in Eurasia Group's Asia practice. Her research includes China's energy and environmental policies, policymaking, Chinese elite politics, and diplomacy. She holds an MA in political sciences and East Asian studies from the French Institute of Oriental Languages and Cultures.