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The China Matrix Perspective
February 5, 1999
by Kenneth Farrall
Previous Perspectives:
January 22: Internets with Chinese Characteristics
January 15: Cracker War on China

The Year of the Rabbit promises to be a pivotal, watershed time likely to shape China's wired destiny well into the 21st century. The path taken will largely be driven by the interplay of two opposing political mind sets: one that sees the Internet and related networking technologies as vital to the long term health of the nation's economy, and another that views the Internet and its associated domain, cyberspace, as an unparalleled threat to state security. These two opposing mind sets have manifested themselves in government policy, action, and public statements since the middle of last year. China has demonstrated an intense and increasing enthusiasm for the Internet, while at the same time attempting to rein in and control those elements it views as contrary to state interests.


As the year progresses, the inherent contradictions within these two mindsets, one that sees the Internet as a powerful tool for economic and social betterment and the other that sees the net as a threat, will begin to clash with increasing regularity. Efforts to control what can and cannot be done or accessed online could begin to impact everyday users and stifle growth and innovation within the China online community and cause growing resentment.

Since late last spring, positive government initiated improvements in the China Internet include substantial upgrades to the ChinaNet backbone capacity, a fourfold increase in international bandwidth, the opening of several new government sponsored web sites, the introduction of a high profile government plan to develop standards for e-commerce, and the announcement that 1999 is officially "Government Online Year."

Government interest in the Internet and its promise of extending the Chinese economic miracle into the 21st century is palpable. In Kuala Lumpur during November for the Sixth APEC Leaders Informal Meeting, Chinese President Jiang Zemin called APEC to help provide developing members with the technical assistance necessary to promote e-commerce, calling it "the future of business."

Yet, even as the most casual observer of the China Internet development is aware, the very same government that has made possible a more than 300 per cent annual growth rate for net usership is becoming increasingly concerned about cyberspace and its impact on state security.

Over the past six months, government actions and public announcements aimed at fighting computer related crime and reining in Internet freedoms have been widely reported. Last fall, software store owner Lin Hai was tried, convicted and eventually sentenced to two years in prison for selling some 30,000 e-mail addresses to dissident online magazine Dacankao. Then, in January, there were widespread reports that the Ministry of Public Security had called for the establishment of computer crime monitoring units in the police department of every city in China. Two weeks later, the government announced new registration requirements for Internet cafes, aimed at limiting the potential for anonymous, anti-government online activities at the cafes. Just last week, an editorial appeared in the official government publication Jiancha Ribao (Investigative Report,) complaining about "counter revolutionary" activity on several popular Internet BBSs. According to Hong Kong based Information Centre for Human Rights and Democratic Movement in China the editorial was accompanied by a new public security bureau initiative to monitor Internet BBSs twenty four hours a day. Once identified, offending BBSs are to be shut down, and individuals who post to them identified and arrested.

Over the same time period, there has been a government crackdown on what western observers would consider more legitimate computer crimes, such as computer-mediated bank theft and unauthorized computer hacking. A growing number of arrests and harsh sentences (including death sentences for two individuals convicted of computer bank theft) have come amidst reports that computer-related crime is growing at an annual rate of 30% and goes largely unreported.

These government actions and policy initiatives help illustrate the specific types of threats that China is feeling from computer networks and the Internet. China's concerns about computer crimes and the vulnerability of its financial infrastructure to intrusion are very similar to modern countries throughout the world. Yet the threat to the Chinese state goes deeper than the very widespread concerns over financial and other types of computer crime. For China, the Internet and its associated domain, cyberspace, are introducing fundamental new problems with the way the state has dealt with organized dissident activity and public challenges to its authority.

History has shown that the Chinese communist party has largely been able to control the scope and intensity of public criticism and dissident activity. The state has been able to make use of a nationwide public security network to keep tabs on political dissidents, shut down dissident press, and disrupt "counter-revolutionary" organizations before they have been able to make any lasting impression on the populace. The state's control over print and broadcast media has given it the power to shape and guide public discourse while continually reinforcing its own legitimacy.

Although the reach and effectiveness of China's public security apparatus has been significantly weakened as a result of economic reforms and new social mobility, it has remained effective enough to keep a lid on organized political opposition.

The ability of China's security apparatus to identify, locate, monitor, isolate, and extinguish anti-government elements is being severely challenged, however, by the new realities of the Internet and cyberspace.

Traditional methods of authoritarian state control -- thorough penetration and surveillance of the social space and the control over the transmission, reception, distribution, and interpretation of information are gradually losing their effectiveness in a world where social activity is less and less subject to the traditional limits of physical space. The omnipresence of the state and control over information is simply impossible within the electronic realm.

In cyberspace, physical location is not a significant barrier to human interaction and social organization. Meetings that once took place in a specific physical location can now be carried out within a shared electronic environment, the participants scattered far and wide, stationary or mobile, potentially anonymous. The problem such organizational potential creates for China's control system is obvious.

Intensive monitoring and surveillance of the country's physical space made possible the reasonably effective identification, isolation, and apprehension of anti-government social groupings. For example, a neighborhood committee representative overhears discussion of meeting, and relays the details to the local Public Security Bureau. Policeman wait outside the meeting location, until all conspirators are assembled, and then carry them all off to prison. With the aid of the Internet, however, organizational meetings can be distributed in both space and time, within an electronic environment that knows no boundaries, that cannot be isolated or surrounded. The sheer number of possible meetings between people rises in orders of magnitude, changing the equation of surveillance and monitoring. The case against Lin Hai and his subsequent sentencing is particularly illustrative of the problems cyberspace is causing for the state security apparatus.

The dissident Chinese publication Dacankao (VIP Reference) has been a major nuisance to Chinese authorities over the past two years. The publication has collected hundreds of thousands of e-mail addresses for mainland Chinese and sends regular mailings of literature highly critical of the government and Communist Party to Internet users throughout China. The Dacankao mailing list includes party elites who have become increasingly troubled by the ease with which pro-democracy mailings seem to end up in their mailboxes.

In the "old days", no dissident publication could hope to maintain a circulation even one hundredth the size of what Dacankao has achieved. Distribution routes would be discovered and traced back to their printing facilities. Publishers would be caught and jailed, the presses destroyed. Today, however, the distribution routes leave no physical trails and the publishers remain safely out of the country. Lin Hai was a prototypical fall guy. Party officials wanted something done, wanted someone apprehended and punished to help put a stop to this growing threat to the government's dominance and control over the media.

Faced with this growing threat, the state needed to find a way to strike back, to identify individuals within China's borders to whom they could ascribe responsibility and punish them. Lin Hai was chosen because he was the only individual the state could identify. But as world attention was drawn to the case, Lin Hai's tangential and limited connection to the publication caused a predicament for the courts. Although the state viewed the distribution of this publication as a high crime, it was unable to identify any party in China with direct responsibility. As a result, Lin Hai was sentenced to two years for a crime that often carries the death penalty.

One can easily imagine the frustration felt by China's security authorities at the conclusion of this trial. Publishers of Dacankao have recently commented that distribution of their magazine to hundreds to thousands of Internet users in China is continuing uninterrupted. And what can the Chinese government do about it?

This is the question that must be haunting Chinese leaders in their sleep. The Internet and cyberspace clearly render impotent traditional methods of social and political control on which the state has relied for decades and thus represent a threat to state security. But the Internet is far from the only threat to the Chinese state today, and therein lies a dilemma.

The maintenance of state power and legitimacy in China (and most other countries, for that matter) is deeply reliant on the nation's economic health. As the Chinese economy has begun to show signs of strain, rural unrest and labour demonstrations have been on the increase. These threats to the social order are quite traditional and independent of modern information technology. The expectation of increased unrest resulting from a weakened economy is one of the primary reasons behind a widespread government crackdown on dissent since the beginning of the year.

If China reacts too strongly against the Internet it risks hurting its prospects for long term economic growth, and thus increasing the likelihood of social unrest and labour dissent down the road.

So, what can China do? How can it promote Internet development in its country, and by extension its long term economic health, while limiting the revolutionary impact of this new technology on its traditional control mechanisms?

Well, the short answer is it can't, but this is not likely to play well with the party elite, so one can understand why emerging policies seem to be ignoring this fact.

As China prepares to enter the fast-paced Year of the Rabbit, we are beginning to see signs of an embryonic, new three point policy toward the Internet and computer networking in China:

1) Increase monitoring of online activity. Identify, arrest, and punish harshly those individuals and organizations engaging in computer crimes or "counter-revolutionary" activities. (Examples of this policy in practice include last year's arrest and sentencing to death of cyber bank robbers and recent reports of a new 24-hour watch on computer bulletin boards nationwide.)

2) Limit the freedom of individuals to access the Internet anonymously by increasing accountabilty. (An example of this policy is the new regulation requiring Internet cafes to register their customers before they are allowed to access the net.)

3) Concentrate the bulk of resource investment for network infrastructure and user growth on China intranets that are largely isolated from the global Internet.

This third policy point, developing a mass version of the Internet in isolation, in many ways parallels the cautious introduction of market economics into China beginning with Deng's urban reforms and Special Economic Zones in the early eighties.

The Special Economic Zones were conceived during the Deng era and introduced in the early 80s to allow experimentation in market capitalism within chosen "test tube" regions in China. The idea was to test the feasibility of market economy in China while limiting the near term effects of the "spiritual pollution" and economic instabilities it might bring. As economic success stories from the zones spread through society so did the overall adoption of market economics in China's once command driven economy.

China hopes to grow its information society in a similar type of temporary isolation while it grapples with the more "unnsettling" aspects of the worldwide Internet. To this end, it is promoting the development of two nationwide TCP/IP based "intranets" -- C-Net (short for City Net) and the China multimedia Network (also known as 169 for the number users must dial to log on.)

The government hopes that these networks can offer robust Chinese language content, e-commerce and e-banking services, while remaining isolated from pornography and other spiritual pollution rampant on the more "barbarian" Net. To accomplish this feat, the government will use a variety of software-based and network architecture-based schemes to place barriers between China and the rest of the online world. Yet the schemes described to isolate these networks are paper thin when faced with the overwhelmingly powerful tendency of networks to link and route around "interference."

In the long run, the isolation of C-Net or the 169 network is no more sustainable than the previously abandoned policy of blocking unwanted Chinese content via the "Great Chinese Firewall." C-Net and 169 are Internet networks in that they are TCP/IP based and support all Internet protocols such as HTTP, FTP, and mail. If one computer within the the "isolated" network can connect to the Net, then the entire network potentially has access. That this is in fact already going on, where 169 users access unregistered proxy servers within the network to get unblocked access to the Net has been widely discussed within industry circles.

As the year progresses, the inherent contradictions within these two mindsets, one that sees the Internet as a powerful tool for economic and social betterment and the other that sees the net as a threat, will begin to clash with increasing regularity. Efforts to control what can and cannot be done or accessed online could begin to impact everyday users and stifle growth and innovation within the China online community and cause growing resentment. At the same time, the policy of monitoring, accountability, and isolation will inevitably be overwhelmed by the sheer volume of online activity and the Net's uncanny ability to treat censorship as interference and route around it. There will be pressure from both sides: those that argue the full benefits of the net can only be realized with a policy of total openness, and those that argue even greater controls are necessary to ensure the state's security.

What role the Chinese communist party chooses to play in this pivotal year could well determine its ultimate fate. China will be wired. This is inevitable. The Chinese culture's emphasis on social networks (guanxi) and the high value it places on both the acquisition and transfer of knowledge make it perhaps uniquely suited to the Net. But if the current government is to lead China into the 21st century and not be dragged into it, it must be ready to let go of its grip on public discourse and expression, at least within the realm of cyberspace.

As China enters this critical period, it is important to recognize that what unfolds will not be determined by China alone; development will be heavily influenced by China's interaction with the global online community. If the international community is to be a positive influence in the fulfillment of China's wired destiny, it must engage China with the proper respect, perspective, and an understanding of its unique historical legacy.

Western reporting tends to focus on the negative, even Orwellian aspects of China's Internet scene and society at large, and as a result provides the western audience with a very one sided view. Day to day life in China is not, by any stretch of the imagination, an Orwellian nightmare. The far majority of citizens live lives free of any predominant government influence. They go to work, play cards, visit with friends, travel around and outside of the country as tourists, and, yes, even talk politics without ever once looking over their shoulder for a public security officer. Most are far more concerned with increasing their economic livelihood than they are with political intrigue, and are in general supportive of the government and by extension the communist party.

This overly negative view of life in China, both on and offline, invites the kind of irresponsible, counterproductive attacks on China's information infrastructure that began last fall and culminated in a cracker declaration of war on China in December. Such ill-conceived acts of cyber terrorism only give added strength to those elements within China's political landscape that contend the Internet is a threat and should be heavily restricted or shut down altogether.

One can only hope that in the coming Chinese year, both the Chinese Communist Party and the international community will find the inspiration to break out of their old habits and work together to build a community of trust and openness where China can find and cultivate its true wired nature.

© Kenneth Neil Farrall 1999

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