This is China! blog

I noticed recently Rio Tinto’s stock has been on the increase since July 2009, when the Chinese government snatched four of its employees in Shanghai and accused them of corporate espionage. The Company’s business is finding, mining and processing mineral resources. Its major products include aluminum, copper, diamonds, energy products, gold, industrial minerals (borates, titanium dioxide, salt and talc), and iron ore. The abduction of the employees shook the business world’s confidence in doing business in China, especially where the State has interests. Business, though, goes on: Rio’s stock on the FTSE is up 25% year-on-year. China is still holding the employees; theoretically, until contract negotiations with China steel makers have concluded – preferably with the 40% discount the Chinese steel producers have been looking for. With China buying from the spot market to meet demand born of the government fiscal stimulus, the near future is bright as gold for Rio. Let’s hope the same can soon be said for its Shanghai office.

The National Day Holiday at the beginning of October has been a watershed retail experience for shops and consumers alike. Never before have I seen truckloads of appliances hauled in through the gates of this and other apartment blocks in such numbers. Chinese people buy appliances in bulk, based on brands they’ve seen in their relatives’ homes, or heard they’re good because they’re German (or Japanese or Korean or American et al). They buy “packages” of white goods to place in their showrooms: refrigerators from Siemens and Haier; air conditioners from Panasonic and Midea and Gree; 42- and 50-inch flat-screen TVs from LG and Samsung – all still embedded in sturdy cardboard boxes fit snugly in the back of great open-air blue trucks that roll into the apartment complexes daily. Smelly workmen unpack and install the trappings of affluence with Chinese characteristics, and the family – usually newlyweds – move into their newly adorned nest. Instantly modern.

The Green Dam incident underscored the notion that the powers that be cannot unilaterally dictate the terms of internet usage in China. Nearly everyday I walk the streets of this fast-paced country I marvel (and sometimes, squirm; and at other times, become annoyed) at how nearly every interaction in China is a negotiation: whether it’s crossing a busy street; vying for space while riding a bicycle in a bike lane; or buying vegetables from a street vendor. The more fractious an issue, the more each negotiation becomes a scrum. A scrum in rugby involves members of opposing teams going shoulder-against-shoulder against each other to kick the ball back to a player on their side. From the outside, scrums look like utter, violent chaos. And yet, deep within the mound of heaving bodies and grinding collar bones is a negotiation of sorts, to get the ball to the players who will push for a score for their team.

In the Chinese internet, though, there is more than one team at play on the field of the internet at any given time. And because of the vastness of the arena of the Web, there are many scrums going on simultaneously that sometimes coalesce into violent melee, like those found in Human Flesh Search Engines, or complete black outs of entire provinces during mass protests.

Online scrums in China as a means to negotiate platforms, domains, rights, limitations and penalties in cyberspace are creating a web space separate from the World Wide Web as the West has come to know and cultivate it. The Fractured Web, as Andrew Hupert calls the dislocation of a portion of the World Wide Web, is the new reality. Andrew is a professor of sales and negotiation at New York University’s campus in Shanghai. He told me over a cup of coffee in a trendy Shanghai cafe a couple weeks back, “No one cares that the central government has blocked Twitter or Facebook or Youtube. Chinese don’t seem upset in the least about it.” After all, he continued, they already have their Chinese equivalents of the social networking sites, and the the Chinese companies are overjoyed that the international competition is off their necks. In other words, Chinese politics and business are sometimes on the same side of the scrum, bundling away access and technologies from Chinese users, with the permission of the netizens themselves. Over the past two months Andrew has written on his blog, China Solved,

Usually industrial and national security policies are at odds with one another. This time they dovetail beautifully. This must have been a no-brainer for Beijing. Suppress potentially disruptive voices and protect key industries at the same time — in one fell swoop. Everyone from the Party leadership to the business community loves the idea.

I can’t recommend highly enough reading Andrew’s blog thread The Fractured Web. There’s important thinking there for businesses and individuals in China who depend on the international internet for their well-being.

And when you’ve got the ball in China, run like hell.