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Does China's pursuit of global Internet leadership mean weakening its authority at home?

September 27, 2017

Pursuing "digital capitalism" was China's response to the great financial crisis of 2008, writes Yu Hong in her new book Networking China: the digital transformation of the Chinese economy.  As global demand fell for China's exports, the government stimulated domestic demand by building communications infrastructure and boosting demand for information and content.  Informatization shifted from one of many policy reforms to a top critical sector.  For critical sectors there is special government oversight, foreign participation is discouraged, and state ownership, a basic necessity.  Ironically, as the Internet grew in China, its stars were non-state actors.  Government operators like China Mobile and China Telecom have to reckon with private companies like Alibaba, Baidu, and Youkou-Tudou that generate demand. As China seeks to lead the global digital future, Hong reminds us that its interests are not monolithic.  Local economic interests are in tension with national goals; domestic innovation with dependence on foreign technology; and preference for investment with weak consumption.  Finally, the Chinese state's pursuit of digital capitalism, which strengthens private sector actors, simultaneously dilutes its state sovereignty.



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