The China Vortex

Chang-Won Kim, who publishes the Web 2.0 Asia blog, recently commented on my article about China’s BBSes, and questioned whether the BBS would indeed become the future of social media in China.

Here is what Mr. Kim says:

In short, the article said:
Much of Chinese internet = BBS
Often the Chinese “group thoughts/activities”, such as the recent (rather unfortunate) “Angry Chinese” incidents, get organized on these BBSes
Chinese’ love of BBS might have come from distrust of traditional media
Outsiders have not figured this out
But the very last part of the article kind of made me scratch my head:
So, BBSes are the real social media marketing tool, and as usual, the Chinese are ahead of everyone else, but just haven’t figured out that part themselves. While the west talks about social media and Web 2.0, China has had a version of it for the past ten years. It may not be pretty, but it works.

Does the fact that BBS is so popular in China today mean a) BBS is the right platform for social media and b) BBS will remain as popular in China for the coming years? I’m not very sure about that, at least using the Korean market as a “canary in coal mine” example.

a) Is BBS the right platform for social media?

If we define “social media” as the collection of unique, diversified individual voices, I don’t think BBS is the optimal platform for social media activities - on the contrary, BBSes can often lead to group thoughts and monoculture, where the agenda is largely driven by big voices.

b) Will BBS remain popular in China for the coming years?

In Korea, we have a popular BBS/forum service in “Daum Cafe”. Three or four years ago, Daum cafe was arguably THE most popular service for Korean netizens. Today, Daum Cafes are still doing pretty okay I guess, but are definitely not the most popular daily web destination as they once used to be. Over the last several years, Daum Cafe has given much way first to minihompies, and later to blogs.

The problem of Daum Cafe as a BBS-type service was that it wasn’t as much focusing on individuals. On BBSes and forums, usually it’s difficult to keep track of the messages users left on different spaces and the subsequent comments left by other users. It’s also difficult to put one’s personal identity to the page that collects all his postings (”My page”), just like a contributor’s personal page on Wikipedia is rarely visited (many people don’t even know such pages exist). People like group activities too, but basically people are individualistic. Users want to have “their own site” where they have all their content under a specific URL which they can use as personal brands.

I would like to stress that I don’t think of the BBS as the future of social media, I can’t see that far ahead. But along with IM clients like QQ and MSN, it certainly does bring in the highest amount of traffic volume on the Internet in China. And regrettably, it is, for the most part, neglected by marketers and journalists for gathering information on what Chinese are thinking and talking about.

Mr. Kim freely admits to using the Korean market as a reference point for his conjecture about how the Chinese market may develop, talking first about how Daum was very popular as a BBS in Korea several years ago, but has now fallen off in popularity. He seems to suggest that the popularity of BBSes will eventually fall off in China; it’s just that no one quite knows what will replace it. He also suggests that BBSes are subject to “groupthink” much more than blogs, which are more about individual expression. As Chinese society becomes more open and individualistic, he suggests, then the need for BBSes will gradually fade.

I would beg to differ.

I think of BBSes as the electronic equivalent of the town square. The town square is always the place where people would go to gossip, share information, and shop. This is what most Chinese do when they go to the BBS. Sometimes they are looking for specific information about buying a home or a car, there are BBSes for this. Other times they are looking to complain about something unfair happening to them, there are BBSes for this. And so forth and so on.

Then sometimes, the BBS is the place where they turn to when they are unhappy with something, such as the recent issues with the Olympic torch relay and Tibet demonstrations in the west. When this happens, the BBS is where they turn to in order to vent their personal feelings because, for the most part, there is less Chinese government influence in the private BBSes and they can speak and organize more freely. When this happens the BBSes become the digital Tiananmen Square, places where the Chinese gathered to show their displeasure on two occasions in the 70s and 80s.

Now, instead of going to Tiananmen Square, they go to their BBSes.

China now has the largest number of blogs in the world, and blogs are the venue for personal expression. With more than 25M Chinese blogs, they are not short of opportunities for personal expression. I tend to think of social networks like Facebook and Xiaonei as social networks for people who want to meet others, but don’t have enough to say to maintain a blog. Instead, they provide a wealth of information about themselves, hoping to link up with others who may find them interesting and appealing, and to find others with shared interests.

Mr. Kim seems to suggest that since South Korea is more developed and more open as a society than China, the Chinese Internet will eventually follow developments in South Korea. While China has closely followed some South Korean trends such as online gaming and in mobile devices, there are some areas where it is still very different.

For one thing, South Koreans seem much more willing to reveal their true names and identities online than Chinese. Cyworld, a fantasy world where virtual tools can be made and sold, was a huge success in South Korea, but it failed miserably in China.

In every case, the Internet closely mirrors the values of a society, and the choices it makes. The choices made by Chinese are still very different from South Koreans. It remains to be seen whether they will more closely resemble each other, or grow further apart. I suspect that they will grow further apart as their societies develop differently.

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Technorati Tags: BBS, blogs, China, Cyworld, Daum, groupthink, im, internet, Korea, msn, qq, web2asia

When the western media and some outside observers talk about “Angry China”, they really miss out on the real story, and even the real questions which need to be asked. For instance, how do very large groups of people, who at least on the surface, have nothing to do with each other, organize in large numbers so quickly in a society which many westerners see as authoritarian? Are they government-led or influenced, or do they do it themselves? How do they come to believe some of the wild rumors which come up, such as for instance, the belief that Carrefour sends a portion of its earnings to support the Dalai Lama and Tibet independence, and are seemingly oblivious to the fact that any large company would like to keep as much of its earnings for itself?

There is a very simple answer to all this: a large part of the organization is done on the Internet in China, specifically on BBSes. While the BBS (bulletin board system) is something outdated and antiquated in the US Internet, it has been a very important part of the Chinese Internet, and I would argue, it is growing and becoming more influential. For the Chinese government, it is a headache because in spite of Chinese government regulations, it is largely unregulated. For western corporations it is a good place to gather information but is useless for advertising, but for many Chinese it is the most important part of the Internet (along with online gaming and their IM client, which is most likely to be QQ or MSN Instant Messenger depending on their age and demographics).

Don’t believe me? Go to your nearest Chinese Internet cafe and watch what people are doing.

Most westerners who come into the China Internet market have no idea of its power and influence, and instead think that the Chinese Internet is largely the same as the US market, but it isn’t. The Chinese government doesn’t really like BBSes because it really is free (as in free speech), and is the breeding ground for all kinds of weird stuff. And while it is important for gathering buzz on products (as CIC, based in Shanghai, does) for corporations, nobody has really been able to monetize it. And, western journalists fail to monitor it, which is why they miss on so many big stories, and end up giving credit to some sinister Chinese government policies. ( I guess it’s kind of flattering for the Chinese government to be given credit for something when most Chinese know that it isn’t that powerful.)

Isn’t it amazing that such a huge and important part of free speech in China has been entirely missed? Fortunately, Tom Melcher’s new blog Live from Beijing! has a very good introductory article to BBSes (h/t to Andrew Lih). I got something of an introduction to the BBS in 1998, shortly after Sina was formed from the merger of SRS and Sinanet. One of the first web applications created by Wang Zhidong was a simple BBS which he demoed to me in the summer of that year. It really took off in popularity with the US’s accidental bombing of the Chinese embassy in Belgrade in April 1999 when millions of angry Chinese hit the Sina news forum. Please don’t think of the Strong Nation forum on the People’s Daily site as being at all representative of Chinese BBSes; it is official and closely monitored for content. The interesting BBSes are all unofficial or semi-official.

Most of the angry Chinese in China, or fenqing, are organized on the BBSes, where they gather and shoot the breeze. These people have time on their hands, and play games, spend time in QQ, and gossip on the BBSes of their choice at the moment. They spend almost no time on what we would call the official Internet, except going to get news on Sina, Sohu and Netease. It is very hard to reach them with advertising.

Now, let’s talk about their persona. For the most part, they:

• They distrust the official media and do not buy magazines, and get as much information as they can from unofficial sources, such as BBSes. They only go to the official media for some sports information and major news information.
• They trust unofficial news more than news which comes from official sources.
• They are the perfect audience for spreading rumors, because they can be quickly organized by anonymous leaders, or “honeybees” as Tom Melcher calls them in his article.
• When organized, they can be huge, in the millions, and they can move like a swarm.

In simple terms, the characteristics of this unofficial crowd are:

• Chinese official government influence is very limited
• They are mostly self-organized
• The numbers are in the millions
• They move extremely fast
• They disappear just as fast as they appeared
• They are almost always anonymous and do not use their real names, preferring instead to use their own handles

In simple terms, they are an issue-focused flash mob. For corporations, they are:

• Not susceptible to traditional PR methods since you are dealing with an anonymous group
• Very tightly focused around one issue
• Move much faster than corporations and their decision-making apparatus is diversified,
• Do not trust/ believe in information from any government, including Chinese

My estimate is that more than 60% of non-IM traffic in China is to these unofficial BBSes, and that number is growing.

When it comes to advertising, most adspend hits that remaining 40% of the official and semi-official Internet, without reaching where many people are. CIC acts as the eyes and ears of corporations, but corporations have not been able to do anything yet with that information and are still reliant on mainstream advertising approaches for both online and offline which are largely out of date. This is the background for my article on why agencies need a new approach to online marketing in China.

So, BBSes are the real social media marketing tool, and as usual, the Chinese are ahead of everyone else, but just haven’t figured out that part themselves. While the west talks about social media and Web 2.0, China has had a version of it for the past ten years. It may not be pretty, but it works.

It’s just that vast majority of outsiders haven’t figured it out yet.

Popularity: 16% [?]

Technorati Tags: angrychina, BBS, carrefour, China, cic, fenqing, gaming, im, marketing, media, online, qq, sina, social, Tibet, US, web2

One of the great challenges in any relationship is about establishing the right tone of dialogue. Should it be friendly, adversarial, competitive, or something else? Can the two parties be constructively critical, or will they just be critical? Can they listen to each other without becoming overly offensive and/or defensive?

Just about the only thing more difficult than setting the right tone of dialogue, is setting a new tone for a new conversation when the old tone of dialogue no longer works, if only because the underlying dynamics has changed. If there was one thing which came clear through my article criticizing the Economist’s Angry Chinese article, it was that this was something which needed to be examined more closely and discussed more openly, if only because the article attracted a large number of readers and comments (34 at the time of writing).

At the heart of the problem is how to break through outdated stereotypes about China. I, for one, believe that its time to get past criticizing “China” and to start being critical about China. Many western media experts and journalists tend to think that Chinese need to be separated from the Chinese government, and become more outspoken about the shortcomings of the Chinese government, believing that only when this happens, will China become a more open society. If they speak out in support of Chinese government policy over Tibet for example, they are quickly dismissed as government-supported actions, or being not aware of Chinese government-sanctioned policies in Tibet. In fact, it is far more likely that the positions of most of the Chinese population will harden in the face of criticism from the west and the western media. Instead of making it easier to reach a compromise, it actually makes it more difficult.

The fact is that the official Chinese media, even though it is state-controlled and monitored, frequently is very open in its criticisms of some government policies. There is a huge number of magazines and newspapers, and all of them now have to attract readers in order to justify their existence as businesses. If you are not reading it already, you should read Danwei just to get an idea of how much Chinese society has changed. Just keep in mind that what Danwei is able to cover is just a small snapshot of what is happening in modern Chinese society.

This is not to say you can say anything in the Chinese press. There are limits, and the Chinese frequently talk about “stepping on the red line” for violating government ground rules. Part of the role of those working in the media is to know exactly where that red line is, because it sometimes moves.

A very interesting development is the rise of the Chinese Internet, as increasingly large portions of the population depend on it for information, trusting it more than the traditional media. Sometimes this means that some of the wildest rumors spread much faster in China than in the west. It is possible to make the case that there is free speech in China, and that it exists in parts of the Internet. But often this free speech is closer to the analogy of the man who falsely shouts “fire” in a packed movie theater. This kind of free speech is unfortunately, more than unproductive, and is sometimes used to whip people into a frenzy. This happened with recent coverage of western media coverage of the Tibetan situation. When the Chinese became angry, many in the western media were taken aback at the scale of the reaction.

Part of this can be ascribed to the power of the Internet and mobile networks in spreading information and rumors.

Welcome to the power of the Chinese Internet.

The problem many western editors make is that they seem to want Chinese to cross the red line, then when it happens, they can use hold it high as an example of how authoritarian China is. This is an overly simplistic view of Chinese society which tries to reduce everything to black and white terms. In an increasingly complicated world, it’s not enough to reduce important relationships to overly simplistic terms, this will only make things worse and set the stage for future misunderstandings which may have tragic consequences for everyone.

Fortunately, there is some dialogue going on, and there are some very smart people who are devoting themselves to discussing these very real and important issues, and are setting the groundwork for a new and more constructive dialogue.

On the English-language side, some of the more interesting websites are:

• EastSouthWestNorth
• Danwei(for coverage of the contemporary Chinese media scene, complete with constant updates on moving red lines)
• The China Business Network(mainly covers business but also includes cultural issues
• James Fallows (I also enjoy his coverage of technology
• The Washington Note(This website proves that something intelligent can come from the global capital of spin

If you want to keep on top of developments in China, these sites will keep you informed.

And of course, there is the China Vortex. You are always welcome here.

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Technorati Tags: China, Chinese, culture, government, internet, media, news, Tibet

I just read The Economist’s lead article this week titled “Angry China”. I came away from it disappointed, and I would like to explain why.

The main gist of the article is that the Chinese government should be worried about the rising tide of Chinese nationalism because a great deal of the anger now directed at western policies and interests are in fact, anger at Chinese government policy. Handled the wrong way, this tide of Chinese nationalism could very well turn against the Chinese government, leading to unpredictable consequences.

Here are the money quotes:

China’s rage is out of all proportion to the alleged offences. It reflects a fear that a resentful, threatened West is determined to thwart China’s rise. The Olympics have become a symbol of China’s right to the respect it is due. Protests, criticism and boycott threats are seen as part of a broader refusal to accept and accommodate China.

There is no doubt genuine fury in China at these offences; yet the impression the response gives of a people united behind the government is an illusion. China, like India, is a land of a million mutinies now. Legions of farmers are angry that their land has been swallowed up for building by greedy local officials. People everywhere are aghast at the poisoning of China’s air, rivers and lakes in the race for growth. Hardworking, honest citizens chafe at corrupt officials who treat them with contempt and get rich quick. And the party still makes an ass of the law and a mockery of justice.

This is a classic “bait-and-switch” argument. The anger directed at the west is in fact domestic Chinese anger at Chinese government policies, according to this thesis. This is a dismissal of any anger at the west as an argument completely without merit, and an attempt to shift all of the blame onto the Chinese government.

It is exactly this kind of argument which Chinese see as western hypocrisy and double standards. Of course there is anger at some Chinese government policies, but these are a separate issue. Please don’t try to change the subject!

Sure, there are some aspects of Chinese government policy which Chinese citizens would like to see change. But the pro-Tibetan independence folk have committed the sin of lumping Chinese citizens together with the Chinese government in their criticisms. To the Chinese, it seems like a classic attempt to hijack the Olympics, something which almost all Chinese are truly proud of, and to turn it into a bully pulpit for their claims of Tibetan independence.

What angers both the Chinese government policymakers and people is that while the country has developed in economic terms and yes, even in human rights terms, that has not been recognized in the west. Instead, there continue to be politicians and media figures who continue to hector China, and play a leading role in shaping western opinions and political policy about China. To the Chinese, it seems like no matter how hard they run to the finish line, there is always someone out there moving the finish line even further away while they are running the race.

Trying to steal the Olympics and letting the Chinese have their day in the sun would be very similiar to insulting an American simply because George W Bush is his president. This is exactly what the pro-Tibetan independence supporters, and the China media critics have done.

Why should these people, who have little deep understanding of China and the Chinese (or Tibetans for that matter) have such an influential role in shaping opinion about such an important relationship as the west’s relationship with China, and be given so much ink and free air time? In light of this, why shouldn’t Chinese get angry about this very unfair and one-sided view which is put forward in much of the western media, and then passed off as the truth? And why doesn’t the western media instead reach out to westerners who have lived in China, and maybe, even speak the language in order to get a deeper understanding of the country?

Is this fair?

The real reason many Chinese are angry is not redirected anger at Chinese government policies, it is a genuine anger at a very biased and one-sided view about China which casts it as irresponsible, selfish, oppressive and wrong, and then throwing all Chinese citizens into the same basket.

The Economist is, generally speaking, a fair and open-minded newspaper, and usually presents well thought-out positions and arguments . It should look deeper than dismiss all of the Chinese anger out of hand.

If this lead article is the best that they can do, then I’m not optimistic about relations between China and the west.

Popularity: 59% [?]

Technorati Tags: American, Beijing, bush, China, Chinese, economist, media, olympics, opinion, Tibet, US, western

Yesterday, Twitterdom in China was on fire with the news, first published on TechCrunch, that Facebook clone Xiaonei had raised US$430M from Softbank, which is huge, even by current Web 2.0 bubble standards. Immediately on Twitter, there was almost an uproar, especially from users in Taiwan, who said that it was ridiculous that a Facebook clone would have such a high valuation. Does Oak Pacific Interactive and Softbank know something which we don’t? (My answer to that is a simple “Obviously yes”.)

But before delving into that, let’s talk about the pluses and minuses of C2C, or “copy to China”, a term which I believe was first used by Tangos Chan, publisher of China Web 2.0 review. I believe that when an entrepreneur does not have a clear idea about what he is going to do, starting with a copy of a currently popular application is a good way to go. After all, if it got funded by VCs in the US, it is highly likely that given the team’s experience, they will also be able to get funded in China.

What is important is what happens after it gets initial funding. Where many startups lose direction is that they look too closely at their competitors, and don’t look at the challenges for many users whom they want to reach. Most ask the wrong questions: They are too focused on their platform and applications, and don’t study the problems their users have in their daily lives.

There are a few simple questions startup founders need to find answers to:

• What are the most important tasks for a person in any given day? (These are always changing according to age, situation, etc.)
• Where do they encounter the most frustration?
• Can you offer a solution to this?

I have a simple way of looking at this: If the need is urgent, then you can charge a fee or subscription for it. If you can help people make more money, you can charge a fee or subscription for it. If it is a hardware solution which simplifies and clarifies life and makes the user more efficient, you can sell it (as is the case with the iPhone).

If it does not do any of the above things, but still offers some informative or entertainment value, then your most likely source of revenue is advertising.

Back to C2C. When OICQ was launched in early 1999, it was nothing except a Chinese-language clone of ICQ. It had an advantage in that there was tremendous need among Chinese for easy convenient communications across the computer and the then-new mobile phone platforms. The management saw this need, offered the services, collected fees all along the way, evolving into QQ along the way, and the company is now worth more than US$11B.

Tencent, the parent company for QQ, saw a social wave in China, copied something which worked overseas, fulfilled the need, and evolved it into something tremendously popular and successful in China. Instead of looking iinwards and worrying about their technology and UI, they looked out, and saw the opportunity in users’ needs and frustrations.

Now the company has more than 500M registered user accounts. It has achieved brand lock-in among most younger Chinese users.

That is why I say that when anyone only compares UI features, they are not thinking deep enough.

Now, the question is whether Xiaonei or any of the Chinese Facebook clones can evolve into something successful. The China of 2008 is vastly different from the China of 1999, and there are all kinds of communications solutions competing for users. The dynamics has changed to favor the user, who now has almost too may choices.

Add to that my feeling that SNS (social networking solutions) are a solution to a problem which is not that urgent for most people (hence the reliance on advertising as a revenue source instead of fee or subscription).

Of course, if depending on income was the only way to make money in this business, then I’m sure that Xiaonei would not have received such a high investment. An article in Plus8star talks about possible strategy scenarios in the move (h/t to Kaiser Kuo).

Popularity: 33% [?]

Technorati Tags: advertising, c2c, China, copy2china, encent, entertainment, facebook, fees, ICQ, income, information, iPhone, oakpacific, oakpacificinteractive, plus8star, qq, softbank, subscriptions, taiwan, techcrunch, twitter, ui, US, VC, venturecapital, web2, xiaonei

China’s economic growth over the past several years has excited many members of the international community, who see it as an alternative to the US’s and west’s leadership of the world order for the past two centuries. There has been a deep underlying distrust of the west, but it was brought to the fore by the Bush administration’s single-minded focus on the invasion of Iraq in 2003, and what to many, have seemed like trumped-up reasons for the invasion.

This, along with China’s dramatic economic growth, has opened up a great opportunity for China to offer an alternative vision of economic and social development. But China has fallen short with the recent fuss over the torch relay, and the actions of the fenqing (angry youth). In a very short period of time, a great deal of the goodwill China has earned has dissipated.

This situation has forced many supporters of the reform and opening-up of China into a lose-lose situation. If they support the Chinese position, they become seen as Chinese toadies, and if they criticize certain aspects of what has happened during the Olympic torch relay, they become dismissed by the Chinese, especially fenqing, as western toadies. Intelligent people should not be forced into making choices like this which are not real choices, and further polarize the two sides. People should be able to make constructive criticism without being forced to make bad choices and being pigeon-holed into one group or the other.

I, for one, believe that there is validity to the Chinese criticisms of the way China and the Chinese have been shown in the western media. There are biases; some are based on ignorance and some may be based on malice. But anger and heavy-handedness are not the right way to correct these perceptions; instead they validate the views and fears of China’s worst critics.

But this is not purely a public relations exercise. If China was a smaller and less influential country, maybe that would work. What China needs is to offer an alternative vision to the western model of development. This model must include dialogue, institutions and rules without a pre-conceived agenda which are pre-packaged for others, who must buy into it. Basically, a new framework needs to be created for Chinese engagement and dialogue on a global scale.

One of the criticisms of western hegemony is that it has offered a pre-packaged vision which in reality, offers pre-packaged western interests at its core. Joseph Stiglitz talked about this in his book Making Globalization Work.

So what is China’s vision? Is it just anger for western wrongdoing and the way it is depicted in the western-controlled media? How much goodwill will venting anger get China? There needs to be a better more thought-out way which offers more constructive results.

More people need to be included, and it should not just be government to government. It should be open where all can offer their views, and be listened to. Differing opinions should be debated and allowed to co-exist. Out of this, some kind of rationale for China’s rise has to come out, and this vision needs to be consistent with the rest of the world, as well as the Chinese people.

China is now a real power in every way. Real powers listen to and debate different views. If they don’t like certain views, they can offer a point by point rebuttal, or they can debate those views, but there is no need to get angry.

New times bring new challenges, and new challenges call for new thinking.

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Technorati Tags: bush, China, dialogue, economics, economy, fenqing, framework, government, media, PR, publicrelations, stiglitz, usa