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    Home / College Guide / China turns - towards Middle Kingdom or Bad Emperor?
     Posted on Monday, September 13 @ 00:00:05 PDT

    When the history of China is written, its likely that the early years of this decade will be remembered as a definitive turning point. This post will illustrate some features of this turn. For now, two things in particular stand out. One, emboldened by the apparent failings of the western countries and its own better performance in combatting Covid 19 pandemic, the government under President Xi Jinping (see this and https://gulzar05.blogspot.com/2020/04/the-problems-with-xi-jinping-turn.html ) has definitely shed any pretensions of tao guang yang hui (hide your strength and bide your time) in its foreign policy. Second, the government has clearly signalled its intent to very actively insert the party into the private sector and family lives in a way that has not been seen since Deng launched the reform and opening era in 1978. On the face of it, these actions may appear as part of the course shift driven by President Xi Jinpings policies. However, as Rush Doshi has written , its also in consonance with the long term intentions of the Communist Party. The shift towards a more aggressive foreign policy was gradually building up for nearly a decade and was also inevitable given the rise of China as a new superpower.

    It coincides with the building and expansion stages of the Communist Partys policy to restore the Middle Kingdom. The actions of President Trump and the pandemic may only have hastened it. But the shifts in domestic policy appears more abrupt and less anticipated. In recent months, the government has actively intervened in technology , education , alcohol , video game , real estate , and entertainment sectors. Consider the example of crackdowns on fan clubs of singers and actors, Experts said the fan groups’ propensity for organisation and effective social action is the chief concern for Xi’s administration as China embarks on a sweeping reassertion of party and state control across the country’s technological, business and cultural landscape. “They see the potential to organise, to mobilise. For the government, that is a very big concern,” said Yun Jiang, a China expert and former policy adviser to the Australian government now with the Australian National University. In all these cases, reining in private enterprise perceived as going rogue, widening inequality, stigmatisation of ostentation, and denouncing of moral corruption have been common themes. Consider another example, the pushback against English , which has long been a craze among the elite Chinese, The education authorities in Shanghai, the most cosmopolitan city in the country, last month forbade local elementary schools to hold final exams on the English language.

    .. Many call the phenomenon “reversing gears,” or China’s Great Leap Backward, an allusion to the disastrous industrialization campaign of the late 1950s, which resulted in the worst man-made famine in human history. Last year, China’s education authority barred primary and junior high schools from using overseas textbooks. A government adviser [recommended] this year that the country’s annual college entrance examination stop testing English. New restrictions this summer on for-profit, after-school tutoring chains affected companies that have taught English for years. FT has a twin essays on these changes. This about how the Party and Xi are marching into the private sector and family lives to control them in a move that has strong Maoist echoes, “A monumental change is taking place in China. The economic, financial, cultural and political spheres are undergoing a profound revolution,” Li Guangman, the pen name of a prominent leftist commentator, wrote in a commentary that captured the zeitgeist. “It marks a return [of power] from capitalist cliques to the people . . . It is a return to the revolutionary spirit, to heroism, to courage and righteousness.”... The most recent shot in Xi’s “profound revolution” came on August 17, when the party’s financial and economic affairs committee, which normally concerns itself with technocratic regulatory and policy matters, declared that it was necessary to “regulate excessively high incomes” in order to ensure “common prosperity for all”.

    Like almost all important party organs, the committee is chaired by Xi... institutions including the state tax administration, the Supreme People’s Court and the housing ministry began rolling out a government-wide effort to enforce common prosperity. Over the past fortnight the tax administration pledged to crack down on tax dodgers and fined Zheng Shuang, one of the country’s most popular actresses, $46m for tax evasion. The Supreme Court declared the 72-hour work weeks common at many private-sector companies to be illegal. And the housing ministry said on Tuesday that it would cap annual residential rent increases at five per cent. The common prosperity theme has become an important part of Xi Jinping thought and is a convenient fig leaf to justify the Partys massive endeavour to control peoples lives through the use of data. This raises the sceptre of digital Maoism , In recent weeks, Beijing has pushed through reams of regulations and policies designed to shore up China’s data security, reinforcing the control it exercises over huge volumes of data used in governing the country, boosting the economy and ordering people’s lives. Such moves comprise a crucial part of the vision of Xi Jinping, China’s leader, to build what some analysts call a “techno-authoritarian superpower” in which people are monitored and directed to an unprecedented degree through the agency of government-controlled cyber networks, surveillance systems and algorithms.

    ..Xi’s data vision has always stressed control. In 2013, he said that “whoever controls data has the upper hand”. A year later he said that control of information has become an important aspect of a country’s “soft power and competitiveness”. The official classification of data in 2020 as a “fifth factor of production”, alongside labour, land, capital and technology, further revealed its importance to Beijing. Personal data is collected not only through online interactions but also through a whole panoply of technologies designed to order a society of 1.4bn people. Digital social security cards, digital money, smart cities, surveillance cameras, social credit systems and other technologies are being rolled out across the country, creating a grand experiment for 21st century authoritarian governance. There have been legislative changes that impose tight restrictions on data transfers, One law, the Personal Information Protection Law, which is due to take effect in November, stipulates that data being moved out of China must either pass a security assessment by the Cyberspace Administration of China, a government regulator, or obtain other forms of official approval. Another law which came into effect this month, the Data Security Law, requires the protection of “important data” and “core data”, the latter of which is defined as information involving national and economic security, people’s welfare or important public interest.

    The definitions are so broad, they could cover almost anything related to private data, experts say.“The laws mean or will mean that all data generated in China must stay in China, unless you have explicit permission to send some of it overseas on a case-by-case basis,” says a senior executive at a large Chinese tech conglomerate. “China is becoming a data empire unto itself.” This leaves multinationals operating in China with establish data centres to keep all their customer data. In practice, this means that if law enforcement agencies wish to check consumer data collected by a multinational in China, they will be able to do so at any time they choose In stark contrast to the brouhaha that is raised when the Indian government insists such data localisation, all the major multinationals operating in China have fallen into line without even a murmur. Tesla, for example, was quick to see that setting up a data centre was a route to greater harmony with Chinese authorities. It did so in Shanghai in May... Apple is another revealing case. In response to Beijing’s stiffening data controls, Apple set up a data storage centre in the southern province of Guizhou in 2017. The following year it announced that its iCloud service in China would be managed by the state-owned data management company Guizhou-Cloud Big Data Industry Co.

    .. the company also complies with Chinese law enforcement requests to hand over customer data to authorities... The foreign company held up most often by Chinese officials as a “model” of how multinationals should behave is Microsoft. The US tech giant already has four data centres in mainland China, all operated by local partner 21Vianet, and a fifth is due to go live next year, it said. The data control regime raises some interesting scenarios and ushers in a world of techno-authoritarianism, “I argue that the CCP has overcome the information acquisition problem, thanks in large part to the digital ecosystems it has established,” says Dimitar Gueorguiev, associate professor at Syracuse University, author of a new book on the topic, Retrofitting Leninism. “As a result, today’s China is more perceptive of public opinion, less prone to policy blunders, and better equipped to manage its own bloated bureaucracy.”... “It’s been called digital Leninism or techno-authoritarianism,” says Andrew Gilholm, a director at Control Risks, a risk consultancy. “The concept certainly has that huge element of political control to it but it is not solely focused on that. The vision is also about governing more effectively using various technologies to overcome perennial governance problems.

    And it’s not only about the big brother stuff... The appeal for Beijing is you use e-governance instead of electoral accountability to rein in local corruption. You can use data instead of privatisation to boost competition.”...The installation of an estimated 415m surveillance cameras all over the country — with densities of over 8,000 cameras per square mile in cities such as the southern manufacturing hub of Shenzhen — makes China’s population by far the world’s most surveilled... But in terms of their capacity for social control, such technologies pale next to the digital renminbi, which has been undergoing tests in several cities this year and may be ready for a formal launch after next year’s Winter Olympics, which are scheduled to be held in Beijing. The currency is designed so that all transactions are traceable in real time, providing a state surveillance capability that does not exist with the current mixture of cash and digital payments operated by private platforms such as WeChat Pay and Alipay. All these actions have come at significant economic cost, which the authorities obviously think is acceptable or even desirable given their larger objectives. In fact, it can be argued that the Chinese authorities hardly care about foreign investment.

    The four largest Chinese technology firms have lost over a trillion dollars in value in the last ten months since the November 2020 cancellation of the Alibaba IPO. The scale and pace of policy shifts happening on the political, economic, and social terrain in China is unprecedented in history. There are too many uncertain elements. The desire for control begets greater desire for control. Absolute power corrupts absolutely. Its an oft-observed feature that too much control is a recipe for breakdown of control. Francis Fukuyama has pointed to Chinas recurrent bad emperor problem, one where the supreme leader in an authoritarian regime derails the countrys progress. Is Xi Jinping the latest bad emperor? Or is China set to reclaim its position as the Middle Kingdom?

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