Challenging Europe and the World: How China is Creating its Own Web (Experience)
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| Part Number | 147 | |
| Number of Parts | 177 | |
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| License | CC Attribution - ShareAlike 3.0 Germany: You are free to use, adapt and copy, distribute and transmit the work or content in adapted or unchanged form for any legal purpose as long as the work is attributed to the author in the manner specified by the author or licensor and the work or content is shared also in adapted form only under the conditions of this | |
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Transcript: English(auto-generated)
00:03
Thank you very much for the introduction. My colleague is still getting his headset, but I am more than happy to do the introductory part.
00:28
If you have been here around for some time, you know that we are the third talk in a row on the Chinese internet. And it's a great honor, but also a great burden, as two non-Chinese speakers to now speak to you about the Chinese internet.
00:50
And we are very happy that we can also relate to a lot of the things that Hu Yong, Professor Hu Yong and Zhang Peng, the founder of Geekpart, have already mentioned. As I said, we are Germans, and as Germans, what we can offer to you, we try to systemize everything.
01:08
We draw little nice boxes and now try to put everything together, what you've heard so far, if you've been around for some time. And then this is the message we would like to bring to you. What does it all mean for us here in Europe?
01:24
So the topic of our talk this evening is challenging Europe, how China is creating its own web. My name is Christine Schickupfer and my colleague is Hao Ke Giro. We both work at the MERICS, the MacArthur Institute of China Studies.
01:43
This is a private initiative, a private research institute based in Berlin. We have been established in October 2013 and what is special about us, we do research only on China, on contemporary China.
02:01
A broad range of issues, the Chinese financial system, how does the Chinese economy will develop, what about social protests in China, but also about digitalization, digital dynamics in China. And what we do is provide solutions, ask questions and provide solutions for practitioners.
02:25
Not for academics only, but for people who are interested in China, like you are obviously, but also for decision makers.
02:49
No problem, sorry for that. As I said, we try to ask questions and provide solutions for people who really deal with China on a day -to-day basis, people who are interested in China, but also for decision makers in the political, economic and social realm.
03:06
So, if you're interested a little more about what we do, we have some flyers with us and you're also welcome to visit our website www.merics.org.
03:20
We do believe that the Chinese internet is driven by three main dynamics. The first one is we have, and I think you had a good impression by that if you've been here for some time by Zhang Peng, very enthusiastic netizens in China. This is the social aspect of it and we will elaborate on that further on in the next 20 minutes.
03:46
The second key driver is the Chinese government, what we call a technocratic governance. The Chinese government believes and uses the internet as one main aspect of their power play, of their propaganda strategy.
04:04
And on the economic side, we have a very challenging dynamic market, mostly driven by privately owned IT companies. I would like to start with the first key driver, the enthusiastic users and there are three aspects to that.
04:24
First of all, as you might have already heard, Chinese netizens mostly assess the internet via their smartphone. 85% of the 650 million internet users mainly assess the internet via their smartphone.
04:41
Only 40% roughly use their laptop or their tablet computer and desktop computers, people use desktop computers to assess the internet. It's about 60%. So really, most of the people read, pay, play, use various kinds of apps using their smartphone.
05:03
The second aspect that the Chinese people and also Zhang Peng is really an illustration of that are what I would call early adopters, especially compared to the Europeans or especially the Germans. So they're very prone to, very curious to use new technology.
05:22
They change, a lot of the Chinese friends I have, they change their smartphone or they have a couple of smartphones and they also like to try various kinds of new apps. They're much more prone than we are in Germany to put a lot of information online, to share a lot of things online. It's really a shared digital culture, you could say so.
05:43
And China is a mass market, so if you have an app and there was an app, I just gave an example last year, there was a very famous app in China by which you could kind of create and beautify your virtual avatar, your personal profile in various social media networks. And there was one app coming out
06:04
and just within a week 20 million users downloaded this kind of app. So it really created huge traffic and of course the founder of the application which is called Lian Meng in China,
06:20
as I said, for digital avatars was very happy about it. But this is just an example to show you people are very eager and very curious to try out all kinds of different things. And this creates in various aspects also a trend which we would call digital mobilization. This is on the one hand side has to do with consumption.
06:44
People really like to, for example, on the so-called China Black Friday, it's the 11th of November, where Chinese people like to buy things on e-commerce platforms en masse because they can get better deals.
07:02
There's also an application like Groupon where you can sign up for collective deals. And Alibaba last year on the 11th of November, Alibaba provides one of the most famous e-commerce platforms in China. They made millions of dollars within one minute on the 11th of November
07:21
because really everybody gets collectively on the internet and looks for deals and buys things. But of course also politically Chinese users use social media networks to organize protests, to organize charity activities.
07:41
But also there's this kind of destructive aspect to that. The Chinese internet, because it's so popular and it's due to the official media, are not as much as a platform of plural opinions as they are in the West due to the censorship. They also use the social media to denounce people, to attack people.
08:04
And some Chinese, they put pictures of local politicians. This is very famous, very popular in China. Put pictures of local politicians online, showing them in compriminating situations like visiting Bordeaux or wearing luxury watches and something like that.
08:25
It's called human flesh search ending. And then a lot of Chinese people also share more information about this local cadre, share his address, maybe try to find out his address and say where does his children go to school.
08:40
So there's also a kind of destructive aspect to that kind of digital mobilization. Which brings us to the second key driver, the technocratic governance. And I hand over to my colleague Hauke for that. Thank you, Christine. Can you hear me?
09:03
So we see there is a huge dynamic going on in the social sphere of the Chinese internet. And of course the Chinese government is a government that very much wants to control things and by all means wants to control information and technology
09:21
and the belief that technology can indeed solve political problems, which is commonly known as technocracy, is a cornerstone of this development. So the Chinese government is not talking about digitalization of the economy,
09:40
but about informatization. So what is the difference here? Digitalization is just maybe the application of a digital sphere to physical objects or processes. But informatization really means thinking about how is information created,
10:00
how is information valued and how does it really influence the political process and how does this process interact with technology. And so the Chinese government does have a broad strategy and really puts a lot of effort into understanding how technology will shape the future of society,
10:24
of the political system and of the economy, of course. And I'd like to say that the Chinese government may be one of the most, of the governments in the world that is thinking most about how to approach this rapid technological change.
10:40
And of course the Chinese government is using these tools, big data and the internet to broaden its control over information and citizens. One very important example of this is the so-called social credit system
11:00
that the government wants to introduce. The social credit system started out as being just a ranking of who pays their bills on time and who not. But it is now evolving rapidly and in the end it shall encompass a big picture of every Chinese person rating their financial situation but also rating how they behave online,
11:27
which people do they interact with, what kind of comments do they leave on websites and on social media and what kind of articles do they read. And all this information should be gathered through working with internet companies
11:41
but also through the state propaganda apparatus and the police apparatus. And so this is really a big dystopian project that the Chinese government is undertaking and is right now working on to create this. And then there is a third aspect that comes into play when talking about how to control information
12:06
and that is IT protectionism. Of course Western software is most of the time a closed source software so when you look at Microsoft Windows for example, the Chinese government cannot look into the system
12:21
and see how does it operate, and it is therefore said to be a threat to national security. And so the Chinese government actually banned Windows 8 from government computers this year, last year, and is seeking to replace more and more software in companies but also in the bureaucracy with Chinese alternatives.
12:49
And so of course this is a huge threat to Western companies who want to earn a lot of money in China, and some do, but the question is can they carry on to do that.
13:01
And this of course leads to the question if there is a protectionism and if more and more foreign IT companies are shut out, what kind of alternatives are there, how is the Chinese IT industry working and what are the developments. This brings us to the third key driving factor, the economical aspect.
13:23
It's a very dynamic but also very challenging market. And of course on the one hand the Chinese IT entrepreneurs are quite happy that the Chinese government through these protective measures also helped them to develop their own applications, their own services
13:41
because most of the US services are not available in China. So that has created a huge, what Zhang Peng has called geek spirit or entrepreneurial spirit. We have a lot of Chinese cities which really are the Chinese versions of Silicon Valley,
14:02
in Beijing, in Guangzhou, also in Shanghai, and also smaller cities. We have a very vibrant startup scene, young people who really want to do something different, want to create something, of course also hopefully become the second Jack Ma, the founder of Alibaba who made a lot of money last year by his very impressive IPO in the USA,
14:27
but really also to create something, to sell their idea, to make a good app or make a good technology. And this is also fostered by the Chinese government. As I said, they provide infrastructure in various kinds of cities, office spaces, also tax policies related to that.
14:47
Because the Chinese government wants to, on the one hand side, solve the employment issue in China, which is among especially young academics a problem. People tend to look for jobs and don't find appropriate ones, so this is one aspect to that.
15:03
And the Chinese government also would like to foster the startup spirit to achieve industrial upgrading, to become a high-tech industry country and not only stay at the stage of made in China,
15:20
but really to develop into a country with tech like created in China. This is the first aspect. The second aspect is because China is a mass market, and I mentioned that to you, so if an application can attract 20 million or 30 million users, you can make a lot of money.
15:44
So people tend to, especially in the application realm, to basically copy prominent applications from the West to adopt them a little bit and bring them to the Chinese markets. Or if they are successful Chinese applications, try to develop them a little bit further.
16:03
But of course, this doesn't only stay at that stage. As Zhang Peng before also has mentioned, we do see various, especially in niche markets, like drones or various also software, for example, for medical hospitals, where Chinese startup entrepreneurs really make real innovations.
16:24
But the incentive, because it's a mass market, to really just kind of slightly adopt a very successful app, for example, is of course, there are huge incentives for that. Yes, and so we have this very dynamic market and we have the big IT companies
16:46
and very successful entrepreneurs that gain a lot of social credit like you also showed. So these CEOs also become political challengers in a way.
17:03
So we see that Lei Jun, the CEO of Xiaomi, is a member of the Chinese parliament and so has some degree of influence. The same is true for Jack Ma. And so we see that these IT entrepreneurs not only stay in their own realm of the IT world,
17:23
but also try to influence what the government is doing. And even criticising the government, sometimes very prominently, the last example was last week, Eric Xu, the CEO of Huawei, loudly criticised the Chinese government's IT strategy
17:42
and said that the protectionism that the government is currently working on will actually harm Chinese IT companies in the longer run because if Chinese IT companies are protected from the global market for a long time, he says, the innovation might stop at some point.
18:01
And so we see that there is a new development and these people are also very self-confident and try to shape IT policy of the government. So now we talked about the different dynamics that we see in the Chinese internet,
18:22
but of course the question is how will it impact us, how will it impact Europe? And of course the theme of this year's republic is finding Europe. And so what does Europe have to deal with? So we have three points that we want to make. The first is we will see more and more Chinese standards.
18:43
We will see Chinese standards in IT products. For example, we know the Wapi Wi-Fi system that actually forced Apple to rebuild the first iPhone to make it compatible with the Chinese market because it wasn't allowed to sell it then.
19:03
And we see that these Chinese standards are a very active part of Chinese foreign policy. So the Chinese government is making huge investments all over Africa and South Asia to bring more IT infrastructure and broadband and mobile communications systems there. And it uses, of course, Chinese standards there.
19:25
And so this may very well be a challenge to classical European development aid that we can see here or that we should look out for and just think about how to deal with it. The second point, as a global expansion, and of course as these IT giants grow,
19:44
they will become more prominent or even more prominent in the West. Huawei is, of course, here for a long time. I think anyone, anybody in the room here will have used Huawei base station, probably this today when using the telephone.
20:02
Some may even use a telephone by Huawei, by ZTE, or by Lenovo. And so this is, of course, true. But the next step that is coming that we see is Chinese e-commerce. Companies like Alibaba has been talked a lot. They are currently also expanding over to Europe and they build a lot of logistics networks.
20:24
And the third and last aspect we would like to mention is the very unique digital ecosystem that has evolved in China due to, of course, on the one hand side, the protectionist policy of the Chinese government, but also due to the really huge demand and the thirst for new applications by the Chinese users.
20:44
And that does mean for us, for example, when we travel to China, we have to deal and we have to use completely different applications. We better should get used to WeChat because WeChat, the not only instant messaging application,
21:00
Jangpeng already has mentioned, because nowadays in big cities you also use this as a platform to, for example, call taxis to make reservations in restaurants and also to connect with Chinese business partners. These days you don't have or a few people have really name cards, but you just show your WeChat account and you can evolve it into a QR code
21:24
and you just say, oh, nice to meet you, please scan my QR code for my WeChat account. So we really, if we go to China, if we deal with Chinese people, we definitely have to get used to these. Sometimes, as I said, very innovative and very cool also applications,
21:41
and of course also for German and European businesses because the Chinese are also coming to Europe frequently and we are happy with that as tourists, as students, and also they are used to using very different applications. They don't use PayPal, they use Alipay, and Alipay, which belongs to Alibaba, the company by Jack Ma,
22:03
they also make a huge effort now to go into the American market and as we see, they also already have started an e-commerce platform called AliExpress here in Europe, of course to cater the needs of the foreign customers, but also to the Chinese customers who might live here.
22:22
So this is our third and last aspect that we really have to, yeah, also probably get used to and deal with a very different set of applications and software services. Thank you very much for your patience, for your interest, and we are happy to take your questions if you have any.
22:50
Thank you for, ah, okay, there we have a question. It aims indeed to be a very broad, very holistic, to paint a holistic picture of how a Chinese citizen is behaving,
23:04
online, offline, in social interactions, in political life, in economic life, in the financial life, so this is really, yeah, it aims to just give a score to every Chinese and say how do you behave, what are you doing,
23:20
and it is of course all about control. Interestingly, the social credit system should not only apply to citizens, but it should also apply to government agencies, to bureaucracies, and so there might also be an interesting catch when you look at the ongoing anti-corruption campaign, for example, can a corrupt office be downgraded in a way,
23:43
will it affect the career of the caterers working in this department if the score is below a certain point. So this might also be an interesting point for government organisation, the way the government is working, but of course I think the main point here
24:01
is about controlling what citizens are doing and one of the reasons the Chinese government has been giving why they developed this system is that a lot of social boundaries in the last year through the reform and opening up policies evaporated so that the control through maybe also the party
24:23
or your local party is not as strong as it used to be. And of course the crucial question to that is how far are the Chinese IT companies willing to provide such kind of data, I mean this is also a discussion we obviously have in other countries of the world,
24:42
but also how the Chinese consumers themselves, if they have any bargaining power or how can their legal rights can be protected in the wake of this really broad-based government initiative. This should all be established by 2020 and this is a government plan which has just been published last year.
25:02
In Chinese it's called Shuhui Xinyong Ti Zhi, so it's social credit system which is, as my colleague said, we collect all kinds of data, you track what kind of things will you buy and what kind of platforms to which people do you talk online and maybe link this with your credit card information or with your medical record
25:23
at the hospital, so really bringing together all kinds of data you create. You may of course also use the tracking of your cellphone, you say, oh this person has been near or around some places where there have been protests, so of course all these kind of data will also be available to the government.
25:52
Sorry, we're a bit over time already. Oh sorry, okay, we can. Thank you very much. Thank you. Okay, well, thank you.