Jan 12, 2021

Axios China

Welcome back to Axios China. Today I'm exploring how the violence at the U.S. Capitol last week, and its aftermath, intersects with our national discourse on China.

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Today's newsletter is 1,420 words, a 5-minute read.

1 big thing: A tale of two Jacks

Photo illustration: Sarah Grillo/Axios. Photos: Costfoto (Barcroft Media), Phillip Faraone/Getty Images

In China, President Xi Jinping has silenced Alibaba founder Jack Ma and launched an antitrust investigation into his company after the e-commerce tycoon publicly criticized state regulators. In the U.S., Twitter CEO Jack Dorsey has suspended President Donald Trump's accounts after the president used the platform to incite violence.

The big picture: The juxtaposition of two almost perfectly inverse situations reveals how differently China and the U.S. have approached the management of tech giants and digital information.

  • The U.S. government has failed to address both the rise of private corporate power and the proliferation of online disinformation, leaving billionaire CEOs and their companies scrambling to find ad hoc solutions after the insurrection at the U.S. Capitol last week — and opening up tech companies to accusations of censorship.
  • China is seeking to avoid the structural economic problems that monopolies have created in the U.S., while simultaneously looking to prevent companies from accruing enough power to challenge the Chinese Communist Party's decisions.
  • Without meaningful civil rights protections, China sidestepped debate on online speech entirely by implementing extremely strict information controls and arresting people who don't comply, creating one of the world's most repressive polities.

What's happening: Ma, one of the world's richest men, hasn't made any public appearances in two months. Xi ordered regulators to halt the Alibaba-owned Ant Group's November IPO — expected to be the largest in history — shortly after Ma gave a speech criticizing Chinese banks and regulators for stifling innovation.

  • Ma's speech angered top Chinese officials, bringing to a head years of concern that private Chinese companies were gaining so much power that they could challenge the Chinese Communist Party.
  • In the subsequent two months, not only have Chinese government agencies launched an antitrust investigation into Alibaba, they've started a sweeping campaign to strengthen antitrust laws and are trying to ensure private companies obey the party's political directives.

In the U.S., another tech billionaire, Twitter CEO Jack Dorsey, has overseen the decision to permanently suspend the American president from his platform.

  • Tech executives like Dorsey and Facebook's Mark Zuckerberg have repeatedly said they would prefer not to make these decisions on their own, calling on U.S. regulators to create regulation that would govern how they police free speech on their platforms.
  • Still, Big Tech companies fear a full repeal of Section 230 —an internet regulation passed in 1996 that gives web publishers liability protection from content published on their sites by third parties — would fundamentally change the internet.

Context: In Europe, lawmakers have been more aggressive about checking corporate power by trying to pass regulation, and some officials there have expressed concern about U.S. social media bans on Trump.

  • "The fact that a CEO can pull the plug on POTUS’s loudspeaker without any checks and balances is perplexing," Thierry Breton, the EU's digital commissioner, wrote in an article for Politico. "It is not only confirmation of the power of these platforms, but it also displays deep weaknesses in the way our society is organized in the digital space."
  • German Chancellor Angela Merkel also described the ban as "problematic."

The bottom line: Social media bans on Trump appear superficially similar to China's rampant online censorship, but they are a symptom not of government overreach, but the opposite — the U.S. government's abrogation of its responsibility to address two of the thorniest issues of our day: the rise of online disinformation and unchecked corporate power.

2. Harassment of Chinese dissidents was a warning signal about disinformation

Illustration: Sarah Grillo/Axios

In the weeks leading up to the November presidential election, Chinese dissidents across the U.S. and at least five other countries found their homes blockaded by dozens of angry and sometimes violent protesters accusing them, wrongly, of being spies for China.

Why it matters: The protesters were mobilized through a disinformation ecosystem that overlaps with the one that led to violence in the U.S. Capitol last week. The harassment targeting the global Chinese diaspora was an early warning sign of what was to come.

What happened: In September, Guo Wengui, a Chinese billionaire media mogul living in the U.S. who has links to Steve Bannon and other Trump allies, made a video denouncing a long list of well-known Chinese dissidents living outside China, labeling them Chinese Communist Party spies.

  • Over the next few weeks, people who called themselves Guo's supporters began to show up at the houses of the people Guo had denounced, holding signs, shouting verbal abuse, and in some cases physically assaulting them.
  • These events have divided and frightened the Chinese dissident community, especially since the people being denounced as CCP spies are prominent CCP critics who have faced repression in China. Guo's motives are unknown.
  • Axios was able to confirm that Guo's supporters protested outside the homes or otherwise harassed Chinese dissidents in at least six countries — the U.S., Canada, Australia, New Zealand, Japan and Germany.

Guo is closely connected to the right-wing information ecosystem that has buoyed Trump and amplified claims of election fraud.

  • Bannon and Guo amplified conspiracy theories relating to the coronavirus and to Hunter Biden's ties to China, in both English and Chinese-language media ahead of the election. Bannon has received at least $1 million from Guo for "strategic consulting services."

The Trump administration's embrace of tough China policies has divided the Chinese dissident community as well, with some supporting him and others opposed to his authoritarian style.

  • The alignment of the pro-Trump anti-CCP camp and pro-Trump election fraud narratives has enabled these views to proliferate alongside each other.
  • A pro-Trump YouTube network that launched after Election Day actively spread far-right disinformation meant to keep Trump in office, but a BuzzFeed report found that the network was backed by The Epoch Times, a vehemently anti-CCP newspaper banned in China and linked to the spiritual group Falun Gong.

The big picture: The unprecedented attacks on Chinese dissidents resulted, in part, from targeted online disinformation boiling over into offline reality.

  • But despite the clear overlap between disinformation in Chinese-language spaces and the American far-right, it did not become major national news.
  • That's likely because Americans do not always pay close attention to issues that are unfolding within immigrant communities.

Go deeper:

3. Catch up quick

1. Secretary of State Mike Pompeo lifted "self-imposed restrictions" on the U.S.-Taiwan relationship. Go deeper.

2. China prohibited companies from complying with "unjustified" foreign sanctions, the South China Morning Post reports.

3. Twitter removed a Chinese state media post that appeared to celebrate the forced sterilization campaigns against Uighurs in Xinjiang, The Guardian reports.

4. Deputy national security adviser Matt Pottinger resigned after President Trump incited insurrection last week, CNN reports.

5. Foreign investors doubled Chinese bond purchases in 2020. Go deeper.

4. Trump seeks scrutiny of Confucius Institutes and Chinese student groups

Statue of Confucius on the campus of George Mason University in Virginia. Photo: Robert Knopes/Universal Images Group via Getty Images

The Trump administration is trying to push through a last-minute policy to heighten scrutiny of Chinese government funding in American education, according to multiple administration officials familiar with the rule, Axios' Stef Kight writes.

Why it matters: China's influence in U.S. classrooms — particularly through Confucius Institutes — has long concerned Republicans. The outgoing administration has been particularly outspoken, labeling them Chinese foreign missions last summer.

  • Just last month, Secretary of State Mike Pompeo urged universities to take seriously concerns of China's influence through funding and student programs and has called for Confucius Institutes to close.
  • The institutes teach Chinese language and culture classes on U.S. campuses. They have caused alarm because they are funded and staffed by the Chinese Ministry of Education, and in numerous cases, they have censored curricula and events.

What to watch: The rule would require colleges and K-12 schools that are certified to have foreign exchange programs to disclose any contracts, partnerships or financial transactions from Confucius Institutes or Classrooms (the Confucius Institute offshoot for primary and secondary schools).

  • Of note: The rule would also apply to any other cultural institutes or student groups, such as Chinese Students and Scholars Associations, that are funded directly or indirectly by China, according to a Department of Homeland Security official.
  • If schools fail to report the information, Student and Exchange Visitor Program certification would be denied.

Be smart: It is not certain the rule will reach the Federal Register before Biden takes office next week, but officials are pushing to get it done in time, the sources said.

  • Once published in the register, the new rule would go into effect immediately as an interim final rule. The Biden administration would have the opportunity to easily undo it, should it decide to do so.
5. What I'm reading

Banning Huawei bans: China tried to punish European states for Huawei bans by adding eleventh-hour rule to EU investment deal (South China Morning Post)

  • Here's the line struck out by veteran EU officials: "China reserves the right not to open this service to investors from countries that block or arbitrarily discriminate against Chinese telecommunications enterprises in law or policy.”

Forced assimilation: China's Inner Mongolia policy triggers Mongolian script revival (DW News)

  • Fascinating video segment hosted by Deutsche Welle's Melissa Chan on repressive new language policies in Inner Mongolia — and how that's being viewed in the country of Mongolia, which shares a border as well as ethnic and cultural ties with China's Mongolians.
  • "This is a fight to remain Mongolian," said Zayabaatar Dalai, a Mongolian script scholar in Mongolia.
6. 1 Taiwan thing: The new U.S. policy in action

The U.S. Embassy in the Netherlands hosted the Taiwanese representative to the Netherlands — a meeting forbidden under previous guidelines.