Tag Archives: Censorship

In Brief: Who’s Really Disappearing Reporters

At this point probably everyone is familiar with the “Bijie Boys” and most of you are probably also aware of how that turned out for the reporter who broke the story. The fact that a reporter would be held for reporting a story no one disputes the veracity of should surprise exactly no one, but there is one aspect of this story I’d like to explore a little bit.

Now, before I start, I want to say that I love Beijing Cream. I find the site both informative and funny and it has been one of my favorite China blogs for a while now. Moreover, I think every writer there is probably at least familiar with the argument I’m about to make, so I’m really just using the Beijing Cream article as an example here. In fact, I suspect Anthony Tao might actually agree with what I’m about to write, but going into all this was rather outside the scope of his article, so he understandably didn’t. Anyway, my point here is that this article shouldn’t be taken as a critique of Tao or Beijing Cream in general.

That said, this section of Tao’s take on the Li Yuanlong’s arrest jumped out at me:

What we shouldn’t assume is that higher levels of government had anything to do with this, considering no one — and I mean no one — would be dumb enough to think punishing a journalist here would be a good idea. If there’s one thing we know about how business is done in these fourth-tier, hinterland-type counties, it’s that the powerful can do whatever the fuck they want, and someone with some power in this case must have decided to act out on his vendetta.

While the latter half of this paragraph is undoubtedly true, I do disagree to a certain extent with the first half. On the face of it, of course, it is quite true: I’d bet an awful lot of money that the decision to detain Li was made and executed by local officials who were not in any contact with higher authorities.

But I wouldn’t say it’s really true that higher authorities had nothing to do with it. The central government’s inability to control, or perhaps lack of interest in controlling, local governments fosters and facilitates an I-am-king-around-here attitude in local officials, and that inevitably leads to stories like this. Central authorities didn’t order the arrest of Li, no, but they have for decades presided over and molded a system that allows local authorities to do things like arrest reporters with minimal consequences, and often no consequences at all.

In fact, the system often offers de-facto rewards to local officials who keep their regions quiet by quieting anyone publicizing negative stories, because the officials that get promoted are often the ones who come from the most “stable,” “harmonious” districts. Officials have long-since learned that the surest route to apparent “harmony” is threatening, arresting, coercing, and censoring the people who would spread negative stories about their districts — reporters, petitioners, protesters, bloggers, etc. This way, higher authorities don’t often have to order the detention of people like Li — they have set the system up in such a way that people like Li can be silenced without anyone in the central government getting their hands dirty.

Moreover, if I — some random dude living halfway across the world — am aware that Li Yuanlong has been detained and “vactioned” at this point, certainly the authorities theoretically responsible for overseeing this sort of thing should be aware of this particular case by now. If they disapproved, undoing it shouldn’t take more than a phone call — the story could have been killed before I even woke up this morning, probably — and yet something tells me that phone call isn’t coming. Even if this case requires a few extra days to work its way through the bureaucracy, I’d be willing to bet it won’t; come Monday, I’d bet Li will still be on vacation. (Though I hope I’m wrong; something tells me this “vacation” isn’t all that pleasant).

(It didn’t take the authorities long to respond to this local problem by sacking the creepy official in question. Somehow, though, I doubt that will happen to the men behind Li’s detention).

I’ve written about the this-is-a-local-issue argument before, because it’s something you hear quite frequently when discussing injustices in China. And while it is, to an extent, true, I think it’s also important to elucidate the higher-level indifference and the systemic structures that makes these kind of local injustices possible year in and year out.

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Another Lesson in How to Fail at Soft Power

I came across this story a couple days ago, and found it mildly amusing, but eventually decided it was worth sharing here because it’s indicative of the larger trend. First of all, here are the basics for those that haven’t already read the article:

Citing “strong resentment from the local Chinese community,” the Chinese government has asked the city of Corvallis to force a Taiwanese-American businessman to remove a mural advocating independence for Taiwan and Tibet from his downtown building.

But city leaders say the mural violates no laws and its political message is protected under the U.S. Constitution.

Taiwanese artist Chao Tsung-song painted the 10-foot-by-100-foot mural last month on the side of the old Corvallis MicroTechnology building at Southwest Fourth Street and Jefferson Avenue. The work was commissioned by property owner David Lin, who is renovating the space for a restaurant and has rechristened the building Tibet House.

In vivid colors, the painting depicts riot police beating Tibetan demonstrators, Buddhist monks setting themselves on fire to protest Chinese rule and images of Taiwan as a bulwark of freedom.

In a letter dated Aug. 8, the Chinese Consulate General in San Francisco formally complained to Corvallis Mayor Julie Manning about the mural’s content and asked for her help in having it removed.

“There is only one China in the world,” the letter reads in part, “and both Tibet and Taiwan are parts of China.”

Now, I can’t be too sure about the quality of the reporting here, because the article refers to Tibet as a “country” and as a “breakaway province” (it most certainly is neither, though some might like it to be). But I’m guessing the basic facts of the case here are true.

Let’s think about this from the perspective of the local Chinese consulate general. A business owner in your area of the US has put up a mural that you find offensive. If this were China, of course, you could have it taken down, and maybe have the guy beaten or tossed in jail for a little while to teach him a lesson. But you don’t have those powers in the US, so your only real options are to ignore it or make a big stink about it. Why in hell would you ever choose the latter?

If you ignore it, the only people who ever hear about it are the people who happen to visit or drive by that building, most of whom probably aren’t even going to understand its meaning. If you make a big stink about it, on the other hand, you turn it into a news story. What’s more, you turn it into a news story that the local government has an active interest in promoting because it makes them look awesome. ‘We stood up to pressure from the Chinese government and defended the first Amendment rights of an American business owner’ — what US government official wouldn’t want that story on the front page of every newspaper? That is exactly why what could have been a tiny non-story is now being discussed on this blog and elsewhere despite the fact that I don’t even know where Corvallis is.

The other question is what the hell did Chinese consular officials think they were going to gain from sending that letter? Surely Chinese diplomats are given at least some basic training in US laws, so they ought to know the local government wasn’t even going to consider taking the mural down. And while I understand this is probably the sort of thing that has to be done from time to time to please the overseers back in China, I can’t imagine anyone in China would have heard of this mural either of the Chinese consulate general hadn’t broadcast it to the world by formally making a complaint about it.

The complaint makes the Chinese government look petty and weak even as it draws attention to two issues the Chinese government doesn’t want anyone talking about. The publicity helps ensure that more Americans are going to come down on what the Chinese government would consider to be the “wrong” side. Sure, consular officials may have scored some points with their buddies at home, but they did so by putting yet another scratch in China’s already-battered international reputation and by setting the country back even further on its increasingly unrealistic-looking quest to wield some kind of measurable cultural power outside its borders.

The Wukan Elections on Social Media

Just in case you’re out of the loop: villagers in Wukan hit the polls today. Although there are elections in villages all over China, this one is especially significant given what led up to it and the extent to which it has got people elsewhere in China thinking about democracy.

For on the ground information, you should look to Tom Lasseter and Louisa Lim, who are actually in Wukan and have been tweeting updates and photos all day. As I’m not in Wukan, I thought I’d take a look at what’s on Weibo instead. (Sure it’s lazy and overdone, but Weibo will probably be dead soon, so I’ve got to strike while the iron is still hot).

With regards to censorship, searches for the “Wukan” are no longer blocked, but it does appear that Sina is at least downplaying the interest in the elections by keeping it off of the trending topics list. As of Saturday evening at around 8:00, Wukan posts were coming in at a rate of several (1-3 on average) per minute, significantly faster than some of the topics that were trending at the same time (average of less than 1 new post per minute). Now, this wasn’t exactly a scientific study or anything, but it does appear that from a posts-per-minute perspective, the Wukan elections should appear on the national trending topics list. That it doesn’t may be a result of the fact that the list is handpicked, not automatic.

But, like I said, searches for “Wukan” are still allowed and posts about the elections don’t seem to be getting deleted. The Chinese media is also covering and discussing the elections, so it’s clearly getting more play than it was back when the town was a rebel village under siege (no surprise there).

As you might expect, the Weibo messages from Wukan residents themselves today are mostly about the election, and from the accounts I’ve looked out there seems to be more-or-less universal satisfaction and pride. They’re sharing stories about old people voting for the first time and kindhearted volunteers helping keep the voting area clean. They’ve also been passing around this comparison photo made by a Beijing netizen that compares the scene today in Beijing (left), Wukan (center), and Hong Kong (right):

(The idea here is that the dog-and-pony-show “two meetings” in Beijing doesn’t compare favorably to the democracy in Wukan or the free criticism of political leaders in Hong Kong.)

Many others outside Wukan are also comparing the elections there to the CPPCC/NPC meetings in Beijing. In one popular post from earlier tonight, a netizen wrote, that the consciousness of the Chinese people is “reduced” by the CPPCC/NPC meetings but is “awakened” by the elections in Wukan.

Among intellectuals, there’s also the expected discussion and qualifying of this “victory” for Wukan’s system, as expressed (among other places) in this comment by a fairly popular independent scholar:

I’ve never been opposed to one-person-one-vote, what I’m opposed to is the worship of one-person-one-vote. It’s just the most shallow layer of democracy. If that’s all you have, and you don’t have any of the deeper layers that separate and restrict the powers [of government institutions] then there’s no way to prevent autocracy.

Most people seem to be happy for and/or jealous of Wukan, and many also see it as a sign of impending reforms or, for some, more sweeping changes:

Wukan is the beginning of Chinese democracy, a single spark can ignite a prairie fire.

We’ll see. As of now, I don’t believe they’re even finished counting the votes. But how things will look in a year is even less clear. Still, it’s hard not to feel good about what’s happening there right now, for me personally and, it appears, for an awful lot of Sina Weibo users, too.

The Siege of Wukan, Part III: Making Martyrs

(See Part I, Part II)

UPDATE 3: With regard to the video links below, my connection to the first file was dropped, but I was able to watch the first few minutes. It appears to be a documentary of sorts on Wukan; however, my file ended while the film was still introducing the town’s history. I’m now trying to download both files again.

UPDATE 2: Just spotted the following weibo post from one of the Wukan connections. Not sure exactly what it’s referring to, but it was just posted a few minutes ago:

Just now a person [or people ((Chinese doesn’t always distinguish between singular and plural, and there’s not enough context here to know which was meant))] from the government came to our school and forced students to sign something pertaining to the selling off of the Biguiyuan land. When the villagers learned of it they became agitated and sprayed them [the government person or people] with urine. Running dogs!

UPDATE 1: Information in the first paragraph corrected. Additionally, I have downloaded the second video file linked below, but get an error with any software I try to open it with. The first file is still downloading. Also of note: Malcolm Moore’s explanation of why they opted to leave Wukan (again, I think you probably need a G+ account to see that).

Malcolm Moore has left Wukan. To my knowledge, there are now no reporters in the village. Based on Weibo posts from Wukan residents, it appears there is at least one Hong Kong reporter still in Wukan.

Surprisingly, though, many of the Weibo accounts I found yesterday remain open. I suspect this is in large part because their networks are quite small. None of them are verified users, and most have only a few dozen or a couple hundred followers. It may be difficult for Sina to find them.

In any event, their posts over the past few days have elucidated what a crucial error the government made in detaining five of the villagers’ leaders and in likely killing ((According to two Chinese media reports I spotted yesterday, the government claims two different parties have examined the body and determined he wasn’t beaten to death, but they have failed to determine why he did die, which makes me quite suspicious. Meanwhile, Xue’s family — who was needed to identify the body — says his body was covered with wounds)) Xue Jinbo.

It’s no secret that Xue has become a martyr in the village, and in almost all the Weibo posts I’ve seen, he and the others who were arrested are being referred to as heroes [英雄]. Moreover, the government’s attempts to propagandize their detention and use them to quell the villagers is, if Weibo is any indication, a complete failure.

Take, for example, the video below. In it, Zhang Jiancheng (one of the five village leaders arrested) meets with his sister (according to the video’s timestamp, this happened on Tuesday afternoon). In the video, after a strange moment when the audio completely drops out, Zhang tells his sister he’s being treated well, he hasn’t been beaten, the food is great, the government is good, and that the village should “trust the leaders” to resolve this problem. In short, he says exactly what the government would want him to say.

http://www.tudou.com/v/mRU9K4Vxyqc/v.swf

So, how is this video being interpreted by folks in Wukan? Here’s a quote from one Wukan user I’ve also seen retweeted by several others. ((To make finding these people more difficult for Sina’s censors, I will not provide the original Chinese text))

Ruichao, Jiancheng, and Liehong [three of the arrested “heroes”] have given us words with hidden meanings, and teach us that in a time of crisis you must be clever. Some of our Wukan heroes have been arrested and treated maliciously by the government; from their words we can tell that the government is treating them ‘specially’, and is also telling them to memorize lines [to recite on camera] but they have a secret understanding with us, [so] they speak calmly. The clothes they’re wearing cover up the cuts and bruises all over their bodies.

Although personally I found Jiancheng’s performance suspicious myself — his “lines” were a little too perfect, and why did the sound drop out when his sister first arrived — I’m inclined to suspect that at this point, there’s nothing any of these men could say while in police custody that would lead the villagers to surrender. There is simply zero trust in the government there, and that people are being tortured and beaten by the police seems to be a baseline assumption.

So, even as the government attempts to use the arrestees for propaganda purposes within the village (see the video above) and outside it (see the news stories about the “five criminal suspects” arrested in Wukan), Wukan villagers are hailing the men as heroes.

I will update this story or post additional stories as the situation warrants. One of the Wukan users has posted two video download links to his Weibo account, and I am currently attempting to download them, but given the speed of my internet, it may be some time before I can properly see what they are.

If you have a faster connection than I and would like to download the videos for yourself, here at the links. I suspect they’ll be deleted soon. I have no idea what they contain, but the user who posted them requested that they be spread and reposted. His weibo post with that request has since been deleted, so the links will likely follow soon.
Part 1 1.1 GB (appears to be a documentary of sorts on Wukan)
Part 2 213 MB (content unclear, file wouldn’t open)

The Siege of Wukan, Part II: Weibo Impressions

(This post will likely be updated repeatedly throughout the day tomorrow, so do check back frequently or follow @ChinaGeeks on Twitter for notifications about updates.)

UPDATE 1: Added video (h/t to CDT), see bottom of post.

Earlier today I wrote a long post about the Wukan protests and siege, which was based primarily on these two articles by Malcolm Moore. If you haven’t already, please read them both now:

Inside Wukan: the Chinese village that fought back

Rebel Chinese village of Wukan ‘has food for ten days’

As I have no way of getting to, let alone into, Wukan, I began to search Sina Weibo for updates from people in that area. Unsurprisingly for a town of more than 10,000 people, there are plenty of them on Weibo. As discusses yesterday, some of their accounts have been deleted, and specific posts about the protests and the siege are being deleted rapidly. But there’s still plenty of interesting stuff worth pointing out.

First, as to how we got here, one user posted this image from earlier in the year, before police had been driven out of the village. In it, you can clearly see (despite the regrettably small size limitation imposed by Weibo) several different instances of uniformed police and what appear to be soldiers beating citizens on the streets, in broad daylight.

Another thing that has struck me reading through these accounts ((I’m not going to link any of them as I don’t want to tip off Sina’s censors, but they’re really not too difficult to find if you want to check for yourself.)) is that these people are not dissidents, at least not in the same sense as someone like Liu Xiaobo or Ai Weiwei. Most of the Weibo accounts I found belonged to young people, and interspersed with the political messages about their hometown and what’s happening there, there are normal posts about all the things you would expect: the weather, school, cute girls (or boys), funny animations, etc.

I feel certain that somewhere after this is over, there will be people who will be looking to write these people off the way they write off any dissident activity in China. But these are not, by and large, dissidents, or even people who seem to be particularly politically inclined, from what I can tell of their Weibo histories. They’re just people who’ve been forced into an extreme political situation and have chosen to stand up for themselves rather than backing down. Good for them. Don’t let anyone tell you they’re being funded by the NED or being misled by Western propagandists. That’s bullshit.

They also are very aware of the thin ice they’re walking on. It seems clear the decision to rise up was not one they came to lightly. Rather, they were pushed to it, it seems, by the wanton greed and utter stupidity of the local authorities.

Being particularly frightened by how that stupidity might well play out as this situation moves toward some kind of resolution, I was moved by this weibo post from one young man in Wukan. He wrote:

It’s dangerous here. I want to get out.

Still, their collective spirit appears to still be strong. Here’s a video from a few days ago; according to the description it says that the same video was also uploaded to Sina and deleted in less than an hour.

The Siege of Wukan

UPDATE 4: Malcolm Moore has posted a new story on this, which I highly recommend you read in its entirety right here. Also added another image from Weibo.

UPDATE 3: Additional images from Weibo added, section on Weibo censorship added at the end of the post.

UPDATE 2: One of the accounts posting images from inside Wukan — a young man who lives there — has been closed by Sina. Clearly, they’re taking this pretty seriously. I know of two other Weibo accounts from users inside Wukan, but I wonder how quickly their accounts will be closed, too. Also, Malcolm Moore tweeted that the villagers estimate they have food enough left for ten days.

UPDATE 1: Malcolm Moore has posted some more details on his time in the village — and how he got in there — here (you may need a Google Plus account to see that. I have also added an additional large image to the selection of photos from Weibo.

wukan-rebellionThe Telegraph’s Malcolm Moore published an explosive story today about Wukan, the village in southern China that is now in open rebellion against the local government. This story has been developing for several months, but Moore’s piece from inside the blocked-off town (no idea how he’s managed that) is one of the best and most comprehensive pieces I’ve seen yet. I highly recommend that you click this link right now and read the entire story. I’ll wait here.

Ok, finished? Great. Beyond that, Moore has been live updating this morning via his Twitter account, posting additional photos and information. As of this writing, the most interesting of those is this tidbit, from around 11 AM this morning:

The rumour in Wukan is CCTV may be coming on Dec 16, so the police may try and reassert control before then

I don’t think I need to explain the ways in which this event is amazing, and I mean that in the literal sense of the word. Anyone with a funtional brain and half an eye on the Chinese media is aware that local government land grabs are a huge source of discontent, but if you’d told me a few months ago that a Chinese town would band together, run the local officials out of town, resist a force of 1,000 police officers intent on entering the town again (but, thankfully, not willing to use lethal force to do so, at least not yet), establish their own makeshift government, and keep the whole thing running even this long, I would have told you you were nuts.

Before we go any further, I want to get this out of the way: no, this is not the first spark in some nationwide rebellion that will see the national government overthrown. In fact, it’s not even a rebellion against the central government, as you can tell from the pleas for help from Beijing in Moore’s article.

Still, it puts Beijing in an awfully interesting position. As I see it, they have three basic options:

  1. Come to the rescue of the down, declare the local government officials corrupt, put them on trial and restore order peacefully. This is, I suspect, exactly what the people in Wukan want.
  2. Come to the rescue of the officials and provide them enough manpower to completely crush the rebellion. This would be easy, but would attract a lot of negative attention internationally, and there’s a risk of it leaking online domestically, too.
  3. Do nothing for the time being, and see if the officials can regain control on their own, or if the rebellion spreads.

The last option seems by far the most likely to me, which is good and bad news for the protesters in Wukan. No help is coming from Beijing, but at least that means the PLA probably isn’t coming either.

Of course, the central government isn’t really doing nothing, as mentions of Wukan
are being scrubbed from the media and deleted online. As you would expect, searching for “Wukan” on Weibo gives you the classic “According to the relevant laws, these results can’t be displayed” message. But weibo is a tough thing to keep completely clean, and there are some folks giving updates from inside the town. Here, for example, are some photographs from the past few days that I found on Sina Weibo:

wukan-rebellion

wukan-siege

How exactly the siege will play out isn’t yet clear, but I’ll be keeping as close an eye on it as possible, and if you’re not already following Malcolm Moore, that’s something you’re going to want to do. I truly hope this situation can be resolved in a way that gives justice to the villagers — especially the family of the deceased — without further bloodshed, but I’m not sure how likely that is.

If the police do attempt to enter the village again, I’d guess they’ll be using something a bit more serious than tear gas. And the villagers may not have the firepower to compete with guns, but that doesn’t mean they’re not trying. Another update from Malcolm Moore around noon reads:

I’m sitting on a balcony, looking over the village, and above a tidy pile of steel-tipped bamboo spears.

Censorship

Citizens of Wukan are attempting to spread news of their movement via Weibo, but unsurprisingly, posts and accounts are being deleted with great speed. The account through which I found several of the photos above has already been entirely deleted by Sina — attempting to access it suddenly returns a “user does not exist” error. The pages of other Weibo users in Wukan look an awful lot like this young man’s page, in which every single thing he’s retweeted over the past few days has since been deleted:

deleted

In addition, at least one Wukan resident was seen complaining on Weibo that Tencent had shuttered his QQ profile, presumably because it included information about what’s happening in Wukan.

[First image via the Telegraph]

Wen Yunchao: An Open Letter to the Investors of Sina

Note: Below is a translation of an open letter written by Wen Yunchao (twitter: @wenyunchao), an outspoken blogger and free speech activist on the Chinese Internet. It is addressed to the investors of Sina Corp, and explores the censorship practices and implications of the corporate structure of the company, which runs the most popular microblogging service in China. If you are not familiar with Wen Yunchao, the recent New York Times feature about him, Where an Internet Joke is Not Just a Joke, is strongly recommended. For an extensive discussion of the methods used by Sina to censor its micro-blogging service, be sure to read the blog post by Jason Ng at Kenengba. The post is in Chinese, but William Farris has provided a helpful English summary.

Update: If you would like to sign the letter, you can send your name, country and occupation to wenyunchao@gmail.com.

Wen Yunchao: An Open Letter to the Investors of Sina

Dear Investors of Sina Corp,

We issue this open letter because Chinese Internet company Sina and its microblogging service, Sina Weibo, fully cooperate with the Chinese government to censor and suppress the free speech of online citizens, without regard to any principle. Their behavior is disgusting.

The blog “Kenengba”, which received the Best Chinese Blog award in the 6th Deutsche Welle Best of the Blogs (BOBs) competition in 2010, once published the article “Ten Impressions I’ve gotten from Sina Weibo”. The article summarizes the censorship tactics of Sina Weibo, including keyword screening and post deletion, unidirectional blocking, screening of posts, banning of speech, “The Little Secretary Helps You”, account deletion, blocking of re-registration, and blocking of IP. The article also uses the case of Sina’s plagiarism from the Google-focused website Guao (http://www.guao.hk/) to illustrate how Sina Weibo not only cooperates with the government on censorship, but also deletes users’ information on its free will. ((可能吧:新浪微博给我印象最深刻的10件事, http://www.kenengba.com/post/3019.html))

Beifeng, well-known Chinese blogger and winner of the 2010 annual award of the French National Consultative Commission on Human Rights, writes: “Sina not only cooperates with the authority to impose censorship, it also conforms to their requests to frame certain people.” The article highlights the practice of Sina to change the account name of a user so that others can use the original name to publish contents which can endanger that user with legal liabilities. ((北风:新浪配合“他们”作恶的明确证据, http://www.bullogger.com/blogs/wenyc1230/archives/383569.aspx))

Xiao Han, associate professor at the China University of Politics and Law, “protests against Sina’s account deletion through reincarnation.” In his article “Why I leave Sina Weibo”, he writes, “the outrageous behavior of the administrators (the banning of unused ID intended for reincarnation) is for all to see. They abuse their power to destroy other people. Although they only destroy IDs, their way of thinking is the same as the Communist Party.” Xiao Han’s blog, on which the article was published, has also been removed by Sina. ((萧瀚:我为什么离开新浪微博? http://news.jcwb.net/news_of_microblog/378.html))

Furthermore, a video on YouTube entitled “How Sina Weibo deceives its users” clearly shows how Sina Weibo limits the number of followers of some accounts. Ms Liu Ping is an indepedent candidate for the local people’s congress of Jiangxi province. Because of her candidateship, over 30,000 people follow her on Sina Weibo at some point. But then Sina Weibo uses deception to reduce her followings. When other users click to follow her on Weibo, the system will send a message showing that the operation is successful, when in fact it is not. Now, the number of followers of Liu Ping’s account has dropped to 20,000. ((Youtube:新浪微博是如何故意欺骗用户的? http://www.youtube.com/watch?v=543pH7uUd-g))

Chinese internet users cannot count on any legal remedies against the actions of Sina which go beyond the bottom line.

Chinese netizens have previously tried to sue Chinese Internet companies for their censorship practices. But none of the cases have ever received a trial. On 16 August 2007, Chinese human rights lawyer Liu Xiaoyuan went to the Beijing Haidian court to sue Internet services provider Sohu for hiding blog posts. The court accepted and filed the case on the same day. But on 12 September, the same court refused to accept the case, which was assigned the civil case number 23191. Liu appealed to no avail.

Some suggest to sue Sina in its place of registration or listing. However, according to publicly available information, what we normally refer to as the Sina portal is different from and has no subordinate relationship with the NASDAQ-listed Sina Corp.

The NASDAQ-listed Sina Corp is a holding company registered in the Cayman Islands. It has four subsidiaries, namely the Hong Kong Sina Co. Ltd. (which operates the Hong Kong Sina portal), Lifang (Hong Kong) Investment Co. Ltd., the California-registered Sina Online (which includes two Sina portals in North America and Taiwan), and the British Virgin Islands-registered Sina Limited.

In mainland China, Sina has registered several companies using the variable interest entities (VIEs) structure, including Beijing Sina Information Technology Co. Ltd., Sina Interactive Corp, Sitonglifang Software Corp, and Beijing MicroDream Creation Internet Technology Co. Ltd. Sina Information Technology operates the content part of the Sina portal, and holds the ICP, news publishing permit and other relevant licenses; MicroDream operates Sina Weibo and independently holds the ICP and other licenses.

Sina Interactive is fully in charge of the advertising business on the Sina portal and Weibo, while Sitonglifang provides technical support to Sina Information Technology and MicroDream. Advertising and gaming revenues from the Sina portal and Weibo are shared to Sina Interactive through an agreement. For Sifanglitong, it receives revenues in the form of fees for technical support. In turn, profits from these two companies are transferred to a subsidiary fully owned by the listed Sina Corp through other agreements.

The Sina portal and Weibo cooperate with the Chinese government on censorship, and they are respectively operated by Beijing Sina Information Technology Co. Ltd. and Beijing MicroDream Creation Internet Technology Co. Ltd. These are purely Chinese entities which only have business and contract relationships but no direct affiliation with the listed Sina Corp. Therefore, it is impossible to force them to stop censorship by taking action in the place of registration or listing of Sina Corp.

In 2011, several New York residents tried to sue Baidu Corp in a US district court for “shielding” the information they published online. Chinese Foreign Ministry spokeswoman Jiang Yu said that China’s management of the Internet is in line with international practices. This is an act of sovereignty which foreign courts have no jurisdiction under international law.

We know that China has severe restriction on public speech, and it is not realistic to request Sina to completely abandon censorship. However, in view of the reality that Chinese netizens have no effective channels to limit the behaviors of Sina, we believe that appealing to the investors of Sina Corp to reduce their shareholding could weaken Sina’s efforts in censorship. This can force Sina to follow clear censorship rules and ensure that users can seek judicial relief in China or third places.

According to Sina Corp’s 2011 second quarter financial report, although revenue has increased year on year, the net profit is down 60.3% to US$10 million. “The operating expense of the second quarter of 2011 is US$59.7 million, compared with US$32 million for the same period last year. The increase in operating expense is mainly related to Weibo marketing and human resources.” According to outside estimates, Sina employs nearly 1,000 people to censor Weibo. For some time in future, Sina Corp will continue to increase spending on marketing and staffing related to Weibo. We think that it is feasible to pressure Sina to reduce its censorship efforts by dumping Sina’s stocks.

The Chinese government’s policy on Weibo has a significant effect on the prospects of Sina. Holding the shares of Sina Corp entails tremendous uncertainty. On 20 September 2011, the share price of Sina dropped by 15.17% to US$92.76, the greatest daily drop since December 2008. Sina’s market capitalization has shrinked by US$1 billion to US$6 billion. Market commentators attribute this drop to concerns over regulatory risks. ((第一财经日报:微博监管风险重挫新浪股价 http://www.21cbh.com/HTML/2011-9-22/wMNDA3XzM2NzUwMg.html))

On 17 October 2011, Beijing Daily published an anonymous op-ed titled “Lack of credibility will mean the end of Weibo”, which calls for a real-name registration system for Weibo. ((北京日报:网络微博诚信缺失将无以立足, http://news.xinhuanet.com/politics/2011-10/17/c_122165528.htm)) The article criticizes the serious shortcomings which come with the rapid growth of Weibo. If left unchecked, these problems will threaten the society. It urges the government to purify the Internet through more comprehensive and targeted measures so that new media will be responsible for ensuring integrity. It suggests that the government should fully implement a real-name registration system for Weibo and an accountability system for online media. Guangdong’s Southern Metropolitan Daily thinks that “a strict real-name system may drive away users.” ((南方都市报:微博要搞实名制? http://gcontent.oeeee.com/6/9a/69a5b5995110b36a/Blog/9a1/4437ac.html))

In a recent interview with CCTV’s program Economic Half-hour, Sina CEO Charles Chao commented that Weibo will be the future driving force of Sina. ((曹国伟:微博将是新浪未来驱动力, http://finance.sina.com/bg/tech/sinacn/20110226/0635235624.html)) China’s regulatory policy towards Weibo will undoubtedly have a significant impact on the prospect of Sina. As social conflicts are becoming more acute, the government’s control on the society will tighten, and the space for free speech will shrink. In this context, Internet censorship will undoubtedly be strengthened, and the possibility of the Chinese government shutting down the microblogging services will always be with us.

Perpetrators and their collaborators should be punished. We hereby urge investors to reduce their shareholding in Sina based on both moral and rational judgments, thereby indirectly applying pressure to Sina and its microblogging service to get them onto censorship practices based on clear and transparent principles.

 

Written by: Beifeng
November 2011