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The Chinese Government’s Influence on the U.S. Media Landscape

On May 4, 2017, the U.S.-China Economic and Security Review Commission (USCC) held a hearing, “China’s Information Controls, Global Media Influence, and Cyber Warfare Stategy.” Sarah Cook from Freedom House provided testimony outlining the Chinese Communist Party’s (CCP’s) strategies in spreading its propaganda overseas. Although her report was in English and not Chinese, her findings are important, so Chinascope has included them in a briefing.

The CCP’s Propaganda efforts have taken three primary forms:

1) Aggressive attempts to expand state-run media outlets’ reach and influence inside the United States. These efforts have included high-profile initiatives like Xinhua news agency’s advertisements in Time Square, the appearance of China Daily newspaper boxes on streets in major U.S. cities, and the launch of China Central Television (CCTV) America—recently rebranded as China Global Television Network (CGTN) America. In the Chinese-language media sphere, this effort has been going on for over 20 years, resulting in CCTV being accessible to over 90 million households in the United States and a series of free pro-Beijing newspapers displacing the earlier dominance of Taiwan and Hong Kong-affiliated papers.

2) Insinuating state-media content into mainstream media or other existing dissemination channels. Chinese officials and state-media reports have referred to this strategy as “borrowing the boat to reach the sea” (借船出海). This phrase refers to disseminating Chinese state-media content via the pages, frequencies, or screen-time of privately owned media outlets that have developed their own local audiences. This strategy has a long history of use in the Chinese-language environment, such as via the provision of Xinhua newswire content for free. In recent years, its robust expansion to English-language media has garnered much attention and public debate. One of the most prominent examples has been the emergence of China Watch—a paid insert sponsored by the state-run China Daily—that has appeared both in print and online in prominent U.S. papers like the New York Times, Washington Post, and Wall Street Journal. In November 2015, a Reuters investigation revealed that programming from the state funded China Radio International (CRI) was appearing on stations in 15 U.S. cities, including Washington DC, via intermediaries of a privately owned media group.

3) Co-opting or partnering with privately owned media to produce and publish content that serves Beijing’s aims: Not all pro-CCP propaganda appearing in U.S. media necessarily originates from writers and editors at Chinese-state run media outlets. Rather, Chinese diplomats and other officials have gone to great lengths to develop “friendly” relations with private media owners and reporters, encouraging them to produce their own content that promotes key narratives favored by Beijing. Outlets and diaspora media owners whose reporting portrays Beijing positively are frequently rewarded with advertising, lucrative contracts for non-media enterprises, joint ventures, and even political appointments. In several instances, Chinese state-media have also purchased small financial stakes in overseas media to solidify such a relationship. Examples of these dynamics are evident in two media entities whose content is disseminated in many parts of the United States. First, the above-mentioned Reuters investigation revealed that only part of the content aired on radio stations owned or leased by CRI’s U.S.-based partner G&E Studio originates from CRI. Other segments are produced by G&E Studio itself in California. Nevertheless, their messaging matches that of Chinese state propaganda. A second example is that of Phoenix TV, the second most widely available Chinese-language television station on cable in the United States. Owned by a former military officer with close ties to Beijing officials, Phoenix TV’s coverage is typically favorable to the CCP.

Censorship and other attempts to suppress the spread of information deemed undesirable by the regime have taken a variety of other, often more subtle forms.

– Direct action by Chinese diplomats, local officials, security forces, and regulators both inside and outside China. These measures obstruct news gathering, prevent the publication of undesirable content, and punish overseas media outlets that fail to heed restrictions.

– Economic “carrots” and “sticks” to induce self-censorship among media owners and their outlets headquartered outside mainland China.

– Indirect pressure applied via proxies—including advertisers, satellite firms, and foreign governments—who take action to prevent or punish the publication of content critical of Beijing.

Source: USCC, May 4, 2017
https://www.uscc.gov/sites/default/files/Sarah%20Cook%20May%204th%202017%20USCC%20testimony.pdf

New Regulations Ban Non-State-Owned Organizations from Internet News Editorial Business

Well-known Chinese news site Sina recently reported that the State Internet Information Office just announced new Regulations for the Internet News Information Services. The new Regulations separated the Internet news editorial business from the Internet news operational business. Only state-owned organizations can conduct the editorial business. Non-stated-owned organizations can republish and redistribute authorized news on the Internet, with the condition that the sources, original captions, original authors and editors are carried over to the republished version. The republished sources of the Internet news must be traceable. The new regulations cover all websites, applications, forums, blogs, microblogs, public social media accounts, instant messaging and direct Internet broadcasting channels. All organizations providing internet news editorial services must first register with the government. These state-owned organizations are required to establish the position of Chief Editor, who will be held responsible for following the regulations.

Source: Sina, May 2, 2017
http://news.sina.com.cn/c/nd/2017-05-02/doc-ifyetstt4169079.shtml

Chinese Family Pays Record Bail Amount

(In Hillsborough, California, in the United States) after Tiffany Li’s family provided a bond worth over US$70 million to bail Tiffany, 31, out while she was going through a murder trial, Tiffany Li and her family were exposed as having ties to a former top Chinese General.

Tiffany Li and her boyfriend were charged with the murder of Li’s ex-boyfriend, Keith Green, who was found dead last May. The judge granted Li’s motion for bail in the amount of US$35 million. Li’s family provided 13 real estate properties as collateral (collateral needs to be twice the required cash amount). Li was then freed on bail.

This bail amount was a record high for San Mateo County, California and ranked eighth highest bail in U.S. history ever to be posted in a state court.

People started to dig into Tiffany Li’s background. It was found that her mother Li Jihong was the sister of Li Jinai (李继耐), former People’s Liberation Army (PLA) General and Director of the PLA’s General Political Department. An unofficial report indicated that the Central Commission for Discipline Inspection had been investigating Li Jinai for corruption since August 2016.

Li Jihong, 62, immigrated to the U.S. many years ago. In 1992, she founded Top Toyo Lotus Construction Development, Inc. in the U.S. Top Toyo Lotus invested $2.4 million in a joint venture (Ji Tai Construction & Installation Company) with a military construction unit, to conduct a real estate development business in China.

Source: Duowei, April 20, 2017
http://china.dwnews.com/news/2017-04-20/59811598.html

LTN: 2017 Press Freedom Index Put Mainland China Near the Bottom

On April 16, major Taiwanese news media, Liberty Times Network (LTN), reported on the 2017 Press Freedom Index that Reporters Without Borders recently released. Taiwan was ranked number 45, a 6-step improvement from last year’s rank. Taiwan’s rank is now at the top of Asia. The five countries at the bottom of the global list are China, Syria, Turkmenistan, Eritrea, and North Korea. According to Reporters Without Borders, the ranking was based on assessments in multiple categories like media diversity, the degree of media independence, and reporter security. Reporters Without Borders pointed out that freedom of the press has never faced such a threatening level as it does today. Even in democratic countries, press freedom is becoming more and more fragile. Reporters Without Borders also announce that the organization is giving up on Hong Kong and decided to move its Asian branch office to Taiwan. In the 2017 report, the top five countries are Norway, Sweden, Finland, Denmark, and the Netherlands. The United States is ranked at 43 and Hong Kong is 73.

Source: Liberty Times Network, April 26, 2017
http://news.ltn.com.tw/news/politics/breakingnews/2048146

Sing Tao Daily: Xi Stresses Placing the Party’s Control over the Financial Industry

According to an article that Sing Tao Daily published, the Politburo of the Central Committee recently held a conference and invited the Central Bank, the Banking Regulatory Commission, the Security Regulatory Commission, and the Insurance Regulatory Commission. During the meeting, Xi Jinping stressed that these agencies should place safeguarding financial security as their top priority. Xi stated that, even though the overall financial risk can be controlled, there must be measures in place to prevent risk from going beyond a certain point so that the agencies “never overlook any risk and never pass by any hidden gap.” Xi also initiated an effort to conduct a complete inspection and investigation in the financial and Internet banking industry. Moreover Xi stressed that it is vital to have the Party and the central administration placed in a position to lead the financial industry. According to the article, there is a need to improve the mechanism that allows the Party to take the lead and form a financial risk prevention system nationwide.

The article quoted the analysis which stated that there might be the possibility of forming a central financial committee like the ones that were formed in 1998 following the financial crisis in Asia. Wen Jiabao, then prime minister, headed that committee, which manages the operation of the financial agencies under the central administration. In 2003 the committee was dissolved and the workload was shared among the Banking Regulatory Commission, the Security Regulatory Commission and the Insurance Regulatory Commission. The article then quoted the words that the director of the China Academy of New Supply-Side Economics gave, “As we all know, the Party has leadership over everything in China. However, if the Party’s leadership is combined with financial security work, it is obvious that it carries certain meanings.”

Source: Sing Tao Daily, April 28, 2017
http://std.stheadline.com/daily/news-content.php?id=1589691&target=2

Caixin Article: Digging behind the Capital Empire of the Anbang Insurance Group

The Sina website recently carried an article on how the Anbang Insurance Group (a Chinese holding company whose subsidiaries deal mainly with insurance, banking, and financial services) grew from a company with registered capital of 500 million yuan (US$72 million) in 2004 to 61.9 billion yuan (US$8.97 billion) in 2017. The source of the article was Caixin’s 2017 17th edition. The article found that Anbang was under suspicion for faking the registered capital that it used for the insurance fund under its control. According to the article, Anbang has gone through seven major capital growth spurts since 2014. The analysis of its capital structure and stockholders indicates that behind its 37 stockholders, the company sits on a network of 101 companies and 86 stockholders and that all of them can be traced to the relatives of Wu Xiaohui, Chief Executive Officer of Anbang in Zhejiang Province. In the international market, Anbang has been aggressively acquiring insurance companies, banks, and real estate in Europe, the U.S., and Korea, including the Waldorf Hotel in New York City in 2014. However, starting in 2016 Anbang has faced major obstacles in its overseas acquisitions. It failed in the US$14 billion acquisition of the Starwood Hotel as well as the acquisition of Fidelity & Guaranty Life, due to its inability to meet the company’s stockholder disclosure requirements that the Department of NY Financial Services had set.

According to an article that Apple Daily published on February 3, 2015, Wu Xiaohui, Anbang’s CEO, was reported to be separated from his wife, who is the second daughter of Deng Xiaoping. The couple got married in 2004. It was Wu’s third marriage. It is believed that Wu used his relationship to start Anbang and that the separation was an indication that Deng’s family wants to cut its ties with the Anbang group.

Source:
Caixin, April 29, 2017
http://finance.caixin.com/2017-04-29/101084867.html/
Sina, April 29, 2017
http://www.sina.com.cn/midpage/mobile/index.d.html?docID=fyetwtf8994622&url=finance.sina.cn/insurance/hydt/2017-04-29/detail-ifyetwtf8994622.d.html
Apple Daily, February 3, 2015
http://hk.apple.nextmedia.com/international/art/20150203/19027111

China’s New Anti-Corruption Moves

Radio France International (RFI) reported that China has adopted two new anti-corruption measures that may be used against high-ranking officials.

The first one is that the Supreme People’s Procuratorate’s website for reporting corrupt officials allows people to report top ranking officials. The drop down list for the Official Rank field includes “state-level officials” which is the highest rank in China. At first, the options were “State-Level – Members of the Party’s Politburo Standing Committee,” “Vice State-Level – Members of the Party’s Politburo, Vice Premier, State Council Members,” … “Clerk,” and “Unranked Cadres.”

However, visiting the website now, the Official Rank field has been changed to an input box from the dropdown list. It is up to those making the report to write in the rank.

The second one is the re-issuance of “Regulations on Leading Cadres’ Reporting Personal Matters” and “Measures on Handling the Check Result of leading Cadres’ Reporting Personal Matters.”

Xinhua published an article with the Party’s Organization Department’s answers to some questions regarding the Regulation and the Measures. It said that “the Regulation is to focus on a ‘few key people,’ or the Party’s and government’s top officials.” “The other one is to focus on the family affairs and assets of the cadres. Family affairs include marriage, passports and visits to other countries for personal reasons, immigration to other countries, business, and whether they are under investigation. Family assets include income, proceeds from services, real estate, stock, mutual funds, insurance with an investment focus, business, and savings and investments overseas.

Sources:
1. RFI, April 20, 2017
http://cn.rfi.fr/中国/20170420-反腐新姿态-可举报常委级领导人-官员需报国外财产与家人
2. Xinhua, April 19, 2017
http://news.xinhuanet.com/politics/2017-04/19/c_1120839564.htm

Beijing City Encourages People to “Capture Spies”

Voice of America (VOA) reported that the Beijing Municipal State Security Bureau issued a regulation concerning, “Award Methods for Citizens to Report Spy Activities.”

“According to the regulation, citizens can communicate through a phone call, letter, or face-to-face reporting methods to ‘report spy activity to the Beijing Municipal State Security Bureau. If the clue is useful, those who report the information can receive awards ranging between 10,000 Yuan (U.S. $1,492) and 500,000 Yuan.’”

“However, this frightened many people who had experienced Mao Zedong’s time (the 1950s to the 1970s).”

“Mao promoted ‘anti-spy’ and ‘capture spy’ movements. During their peak time, thousands of spies from the U.S. and the USSR were ‘found’ and many families were torn apart. There was countless evidence proving that the then President of China Liu Shaoqi was a traitor and his wife was a strategic spy from the U.S.”

“After Mao’s death, the Communist Party obtained countless evidence that the previous thousands of spies were wrongfully indicted. Liu Shaoqi was not a traitor but rather a great leader of China and his wife was not a U.S. spy, either.”

Source: VOA, April 20, 2017
http://www.voachinese.com/a/news-beijing-offers-hefty-cash-reward-for-spy-tip-20170410/3803973.html