Big brother is creating 2 Chinas

By Adam Minter / BLOOMBERG

Even for Chinese authorities, who have long tried to limit the influence of foreign media and ideas, last week marked an escalation. In the span of a few days, authorities blocked access to Twitch, the video-game live-streaming platform owned by Inc; ordered a purge of foreign content from school textbooks; and proposed restricting foreign programming — especially current-events shows — from television (TV) and online streaming sites.

One might take the clampdown as yet more evidence of the government’s hold over what Chinese can see and read. In fact, such restrictions are only further dividing China into a society of information haves and have-nots — of cosmopolitans and everyone else. Chinese with money, especially in cities, can circumvent official controls via technology and travel. Meanwhile, rural and less affluent Chinese are left to consume what censors deem appropriate. It’s a chronic condition that underlines existing economic and social divisions, and it’s sure to get worse.

The urban-rural divide has been a source of social and political tension throughout Chinese history. That’s not news to the current government, which has recently doubled down on efforts to spur rural growth. Yet, by almost any measure, the divide persists.

According to a recent working paper from the International Monetary Fund, income inequality has widened more in China than in any other developing region since 1990.

Among the contributing factors are a lack of educational opportunities in rural China and the resulting lower incomes. For more than a decade, average disposable incomes in cities have been more than double those enjoyed in the countryside.

A yawning digital divide only exacerbates the problem. According to the government, the population of Chinese Internet users swelled to 802 million in the summer of 2018. As impressive as that number sounds, it leaves out almost two in every five Chinese, for an Internet penetration rate of only 57.7%. That’s well behind rates in most G-20 countries and far behind the government’s own aspirations.

This plays out in ways that are more and less obvious. For example, the 42.3% of Chinese who aren’t connected to the Internet are subjected to the most stringent levels of censorship that China exacts. Traditional media — films, TV, radio, newspapers and books (including textbooks) — are strictly vetted for messages that don’t conform to the government’s core priorities.

The world of information expands greatly when a citizen can afford to purchase a smartphone — even one that’s subject to China’s savvy and evolving online censorship systems.

The ceiling rises even further as incomes grow. China’s university campuses, for instance, have long been hubs for the piracy of music, films and TV. If you want to watch “Crazy Rich Asians” — a movie that hasn’t been released in China — on your phone, the quickest way is to ask a college student for directions to the nearest pirate streaming site.

Meanwhile, wealthier Chinese can afford to set up virtual private networks (VPNs) and other means of leaping China’s Internet controls (China’s announced spring 2018 crackdown on VPNs hasn’t been implemented fully). Decoder boxes that evade censorship and copyright controls are increasingly popular.

Foreign visitors to China (including myself) are often surprised to find that twenty something Chinese are more up-to-date on US films and TV shows than many young Americans.

Wealth also provides access to information beyond China. Over the last 40 years, 5.2 million Chinese have studied in overseas educational institutions, using uncensored textbooks and with access to an uncensored Internet. That’s a small percentage of China’s population, and many of them remain overseas. But those who return form a kind of information elite.

They’re also far from alone in developing a cosmopolitan outlook. In 2017, Chinese tourists took 129 million overseas trips, making China the largest source of overseas travel in the world. Shopping, beachgoing, and sightseeing — not information evasion — motivate most of these journeys.

Nonetheless, exposure to places beyond China’s borders only further widens the gap between China’s information haves and have-nots.

For now, economic growth, upward mobility and nationalism have blunted discontent among China’s elites about increasing censorship, while a desire to join their ranks has taken the edge off rural discontent.

Long-term, however, the information gap only serves to worsen an income gap that remains among China’s most serious and chronic problems.

If China is really serious about becoming an information economy, it’s going to have to let all of its citizens see the same information.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.