Editorial The Wall Street Journal, 04.05.2016
China’s leader wants absolute control over information
The Journal reported Wednesday that Chinese government officials are warning economists, analysts and business reporters who point out problems such as capital outflows and rising bad loans that they should be more upbeat. That could mean the economy is in worse shape than previously thought. And it shows that the government’s obsession with restoring authoritarian control over all aspects of life is spiralling, well, out of control.
The penalty for negativism is not spelled out, but after what happened to Wang Xiaolu there is no need. A reporter for the financial magazine Caijing, he accurately reported last year that the authorities would soon scale back measures to prop up the stock market. Mr. Wang was detained and forced to confess his “crime” on state television.
Without the free flow of information China can’t build a functioning market economy. The regime’s Western apologists, among them many business leaders, long claimed that things would get better because there were no communists left in the Communist Party.
Yet since he came to power in 2012, General Secretary Xi Jinping has put politics in command, as Mao Zedong put it 50 years ago. Mr. Xi urged Party members to “embrace the spirit of Mao” and make ideology the priority.
To that end Mr. Xi strengthened the Party apparatus within state-owned and private companies. And he attacked all forms of foreign influence, including business. Officials harass foreign companies by holding up licensing and certification, antitrust actions, attacks in the state-run media, and a range of disciplinary actions including fines and detention of executives.
Information-technology companies are the top targets. A new counterterrorism law and forthcoming cybersecurity law require technology companies to store data locally and to provide encryption keys. That effectively means surrendering their intellectual property as well as the privacy of customers. A Jan. 27 joint letter from the U.S., Canadian, German and Japanese ambassadors complained that the laws “have the potential to impede commerce, stifle innovation, and infringe on China’s obligation to protect human rights in accordance with international law.”
Apple Computer closed down its iTunes and iBooks services in China last month apparently as a result of government blocking. That prompted billionaire investor Carl Icahn to sell his entire stake in the company, citing political risks. Beijing will “make it very difficult for Apple to sell there,” he explained.
Optimists hoped that Mr. Xi would prove a reformer in the mode of Deng Xiaoping. But Deng had a “go for growth” mentality and was willing to tolerate some liberalization of information flows to make China prosperous. Mr. Xi seems determined to restore levels of control last seen under Mao, with predictable economic consequences.