iPhone’s possible impact on China

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On June 12, 2008, obxfun asked the board their opinion of what might happen in China once ubiquitous internet access become possible with a device like an iPhone. X_trapnel posted the following in answer to that question: Here are a few thoughts from my own perspective, for what they’re worth. From the outside it makes sense to talk about China as if it were monolithic and coherent in ideology and policies, but inside China it quickly becomes clear how vast, diverse, and varied life can be, including government policies. One telling example: although Taiwanese-mainland relations at time look so tense as to approach a state of war and shots have been exchanged in tense areas such as Kinmen - Xiamen, where the borders are only a few miles apart, at the same time there are 100,000s of Taiwan businessmen in China working happily and productively in a wide variety of capacities, including those from Quanta and Foxconn who supervise Apple production. China and Taiwan need each other, even if they may be at war in the near future (although that doesn’t seem likely at present). China may appear closed and communist and that is nominally true, but within China the state appears something else indeed, more like a classic fascist state, with a single strong party working in close cooperation with business and the military under an ideology of nationalism. The difference is now that there are beggars on the street, private property rights have been given a measure of protection, much of the national wealth is organized through private enterprises, and most of all huge disparities of income are now openly accepted by everyone. First and foremost at present everyone wants to get rich. And that is not an impossible goal. A talented corporate lawyer in Beijing at a top firm earns in excess of US$2 million/year, which translates into something like $8 million in buying power. And many bankers and corporate executives do better. As a residue of the communist era, there still are a number of state-owned enterprises (meaning that the state owns shares in the corporate entity), but they are run on a for-profit basis, and the failing SOEs are a huge millstone around the government’s neck, especially in the rustbelt of China, the northeast. So the government, on all levels, has a vested interest in making money and promoting economic development, and they understand that so doing requires exchange of information and good telecommunications. At the same time the issue of control of information is also important to the government. Many things happen (e.g. local riots over some abuse by a local official) that are never allowed into the public discourse. People in China in private do speak freely on any topic (you could not do so before the 1980s), and intellectuals in public at times with impunity say bold things (e.g. China needs to move to a two-party system) that challenge the government’s position. There are still important limits, especially on the issue of Falungong Buddhist, Taiwanese Independence, and Tibet (99% of the Han Chinese, as far as I can tell, want a harsher policy on Tibet than the government is following and are angry at what they perceive to be western insults to their national sovereignty). Censorship of the media is most visible in the lack of foreign channels available on cable services and the scanty selection of western films allowed in. Internet censorship is more subtle and in truth many Chinese don’t seem to know that it exists or not to care. The notion that the state can supervise public morality is mostly taken for granted, for better or worse. Yet many intellectuals do care, of course, and it was a notable victory for them that wikipedia was recently allowed back in, albeit in bowlderized form. However, most Chinese don’t read English easily and use only domestic web sites, some of which have quite open and daring chat rooms, always subject to cat and mouse games with over-zealous authorities seeking to censor them. In practice there is wide-spread use of proxy servers, so that even moderately technical internet users can freely surf the web, and the government at present accepts this leak. On the issue of the iPhone, there are already many smart phones in China, albeit none with the ability to browse the web so easily. I suspect the decision about the iPhone will be first and last about how much profit the companies can earn from them. They may prove disruptive, but the telecommunication authorities who run the Great Firewall at present seem confident that they can keep up with the challenge posed by filtering IP packets into and out of China. The latent potential of the iPhone to disrupt the government’s control through video-chatting (which will surely be possible through other cell phones as it is already in Japan and Korea 3G) will be weighed against their profit-making potential and how engineers can learn to assimilate their technology and likely imitate it for future export. Just a few stray ramblings. . .    

techstock2000 @ June 12, 2008