Is Beijing about to Boot the New York Times?

The Chinese government's crackdown on Bloomberg and the "paper of record" reaches a head.

Before the death of Mao Zedong in 1976, journalists covering China had to make do with peering in from afar. "I would look longingly across the border, and say, ‘Why can't I be there?'" recalled veteran foreign correspondent Jim Laurie, about his early days reporting from Hong Kong. Today, of course, China is a universe away from the chaotic and autarkic 1970s. As China moved away from the periphery and towards the center of world and economic affairs over the past few decades, interest in the country has skyrocketed: there are now hundreds of journalists reporting in China for Western publications, while countless thousands other foreigners have written about the place. But now, history may be repeating itself: Beijing has threatened to de facto expel roughly two dozen foreign correspondents working for Bloomberg and the New York Times, arguably the two publications who have most successfully covered China over the last few years.  

Two New York Times journalists working in China, speaking on background, described how Beijing is withholding visa renewals for their 12 journalists working in China. Foreign journalists working legally in China need to renew their visa every year, a procedure which usually happens in December. But as of Dec. 10, the Foreign Ministry had not yet begun to process the applications. "Officials said they could not process those visas," one of the New York Times reporters told Foreign Policy. In early December, Jill Abramson, the executive editor of the newspaper, said that what was once "an annual nonevent" has become "a very big worry."

In 1979, after the restoration of U.S.-China diplomatic ties, Beijing opened up to American media organizations, and several newspapers and magazines, including the New York Times, established bureaus there. Throughout the 1980s and 1990s, these operations were generally quite small. But by the late 2000s, even as the financial crisis decimated hollowed-out international bureaus in other parts of the world, China-based newsrooms kept growing. In Sept. 2011, Bloomberg announced the "opening of expanded offices in Shanghai to accommodate expanded news, customer support and regional-specific services to meet growing demand in China." In 2011, the New York Times also decided to enlarge its bureau, and in June 2012 launched a Chinese-language edition. In an interview then, the paper's foreign editor, Joseph Kahn, said, "We hope and expect that Chinese officials will welcome what we're doing."

This turned out to be overly optimistic. While operating a bureau in China had always been complicated, serious problems started for the New York Times after they published an October 2012 story about the shocking wealth amassed by then Premier Wen Jiabao's family. (Wen's family claimed the story, which won a Pulitzer Prize, was untrue.) "The authorities took certain punitive measures," one of the journalists told Foreign Policy: the website was blocked and Chris Buckley, a seasoned foreign correspondent, was forced to leave the country after Beijing refused to give him a visa in December 2012. (China's Foreign Ministry later claimed Buckley hadn't been expelled -- only that he incorrectly filled out his visa application.) 

The current round of difficulties began, the reporters said, after the Nov. 13 publication of a story about J.P. Morgan Chase's alleged link to Wen's daughter. "My guess is they concluded in recent weeks that they needed to take another step because they thought we hadn't gotten the message," one of the journalists said. The other concurred: "Everything was going fine" until the second Wen story came out.

Things have become complicated for Bloomberg as well, but there's more dirty laundry. Bloomberg had roiled the waters in China for a series of groundbreaking 2012 stories, written by several journalists but headed by veteran Bloomberg correspondent Mike Forsythe, that disclosed the family wealth of two top Chinese officials: disgraced party boss Bo Xilai and Chinese President Xi Jinping. Following these prize-winning investigations, China ordered local financial institutions to refrain from purchasing Bloomberg terminals -- the main profit-generating engine of the media empire -- and blocked its website. Things got worse in early November, when the New York Times reported that Bloomberg journalists had accused editor-in-chief Matthew Winkler of suppressing an investigation into the wealth of a Chinese tycoon and his links with the Chinese government, for fear it would offend officials in Beijing. (Bloomberg denied this allegation.) Winkler allegedly compared reporting there to reporting inside Nazi-era Germany. 

In mid-November, Bloomberg suspended Forsythe. But things took a turn for the bizarre on Dec. 7 when Leta Hong Fincher, Forsythe's wife and an expert on gender in China, tweeted "Can anyone recommend a feminist lawyer in Hong Kong?" That tweet was followed by another: "Has anyone heard of a spouse being sued for breaching a company's confidentiality agreement when the spouse never worked for that company." She later deleted the tweets, but confirmed to Foreign Policy on Dec. 9 that "she is seeing a lawyer"; she declined to elaborate further. Ty Trippet, a Bloomberg spokesman, declined to comment for this story.

While Bloomberg has been quiet about its strategy in dealing with official troubles in Mainland China, the New York Times appears to have made it clear to Beijing that its inability to operate in China would not be taken lightly by the U.S. government.  On his trip to Beijing in early December, U.S. Vice President Joe Biden raised the issue with Chinese President Xi Jinping, and publicly chided Beijing, saying the United States has "profound disagreements" with the "treatment of U.S. journalists" in China.

"I think Biden's mention helped," said one of the New York Times reporters. "It put it at the top of the agenda, and let the Chinese know that there would probably be repercussions."  

If Beijing actually does plan to expel both bureaus it would constitute the government's biggest move against foreign reporters at least since the upheaval following the Tiananmen Massacre in 1989. Evan Osnos, a staff writer for the New Yorker and a long-time China correspondent, called this recent move "the Chinese government's most dramatic attempt to insulate itself from scrutiny in the thirty-five years since China began opening to the world." Paul Mooney, a longtime China-based chronicler of that country's human rights abuses, had his visa rejected in early November, in another sign of tightening for foreign correspondents in China. Reuters, Bloomberg, and the New York Times "don't have the ability to influence the Chinese government," said Mooney. "I think we really need to have some kind of action. Maybe against media executives in China, or officials -- to give the message that this is not acceptable."

One of the New York Times reporters interviewed for this article suggested that Washington could slow down the approval process for U.S.-based executives for Chinese state media companies, like Xinhua and CCTV. "I would advocate this reciprocal kind of delay, and then if that didn't work, tit-for-tat visa denial, targeting executives," this reporter said. "After all these years in China, this is what I see as the only thing that works, with the Chinese government. They don't play nice." 

It's not too late for Beijing to pull back and allow the bureaus to continue to operate.  "Perhaps they won't pursue the nuclear option," said one of the New York Times journalists, adding that "it would be a public relations debacle" if the bureau was expelled. "There is talk about contingency plans, but it's not our priority right now," said the other reporter. "We have until Dec. 17 or 18 before the first of our residency visas expires." If they are expelled, the plan is to continue reporting, but from Hong Kong and Taiwan. "It's not ideal, but we're going to have smart and trenchant coverage of China either way," said one of the journalists. An executive at the New York Times familiar with the plans, who asked to speak on background, said reporting on China "is best done from China, but it can be done from elsewhere as well." Hong Kong, where the newspaper has a large presence, is an "obvious" choice.  

The experience of Chris Buckley, the New York Times reporter who settled in Hong Kong after his visa wasn't renewed last year, has shown that it's not impossible to cover China internationally. He has continued doggedly reporting from Hong Kong, though his wife and daughter remain in China. "The personal toll on Chris has been immense," said one of the New York Times  journalists. A few weeks ago, I tweeted that Buckley may be the future of China journalism. "I sincerely hope not," he responded. Sadly, that's looking more and more likely. As for Buckley himself, it doesn't appear likely he will be allowed to move back to China anytime soon. Just like Laurie and his peers in the 1970s, he is consigned to sitting in Hong Kong and gazing longingly at the Mainland. And if things get worse, he'll soon have company.

Guang Niu/Getty Images


No Quiet on the Western Front

The eurozone lived to fight another day. But a new battle is brewing.

Is there light at the end of the Chunnel? Five years after the global financial crisis kicked off, the eurozone is finally starting to regain its economic footing. Budgets are being balanced, growth is returning, and questions about countries leaving the currency union have ebbed. Yet despite a positive outlook for the short term, the eurozone still hasn't resolved the issues that cloud its future as an economic bloc.

The eurozone arguably turned the corner in July 2012, when Mario Draghi, the president of the European Central Bank, pledged "to do whatever it takes to preserve the euro." Not only would the bank keep short-term interest rates low, but it would also bolster the finances of member countries by buying their bonds and thus reducing the interest they paid on their debts.

The markets took Draghi at his word, and confidence in the euro and the eurozone began to strengthen. Meanwhile, Spain cleaned up its banks and launched a reform of its public sector; Portugal survived the worst of its austerity program; and Ireland became the poster child for fiscal and financial turnaround. Even Italy showed signs of exiting its two-year recession, provided it could achieve a measure of political stability.

Indeed, for much of 2013, the eurozone seemed well on its way to recovery. Its overall recession ended over the summer, and at the time of this writing, the euro's trade-weighted value had risen more than 8 percent since Draghi's speech. Only Greece has continued to limp along, barely satisfying the terms of its existing bailout and possibly heading for another one.

Still, it's hard to find anyone these days who thinks Greece or any other country will leave the eurozone soon. Draghi's October visit to the United States was something of a victory lap; at a speech in New York he said, "[The] euro area has a strategy to return to sustainable growth and employment, and that strategy is actually being executed." All policymakers need to do, he said, is to "stay the course."

In the short term, he might be right. Budget deficits, which averaged 6.5 percent of GDP in 2009, are now at 3.7 percent. Public debts have risen substantially, but they are still controllable in non-bailout countries. And the International Monetary Fund expects GDP to grow in every eurozone country except Cyprus and Slovenia next year.

The medium term, however, is a different story. High unemployment in the eurozone and the European Union as a whole has inflicted damage that may take many years to repair. The labor force in a country doesn't always bounce back when economic growth returns. People who have been jobless for years may be too discouraged to look for work again. The return of growth may be accompanied by demands for higher wages among the employed, narrowing the scope for new hiring. And the skills of the unemployed may have become obsolete during their long spells of joblessness. As Draghi and others have suggested, young people may be at a particular disadvantage in such a difficult labor market. They have little or no experience, and their education may not have given them the skills employers are seeking.

Even if the eurozone survives these dark portents, there is no guarantee that the problems of the past several years won't recur. This is because the fundamental problem with the euro has not been solved: A single monetary policy is still not appropriate for all the countries that use the currency, and it may never be.

This is mainly because the economic cycles of the members have failed to synchronize. Although the variance in growth rates among eurozone members came down in the previous decade, since the global financial crisis it has returned to pre-euro levels.

Enhanced trade was supposed to aid synchronization, but the eurozone's members haven't performed any better than the three other EU countries -- Britain, Denmark, and Sweden -- that opted not to join the currency union. Since 2001, when there were 12 EU countries in the eurozone, the two groups' exports within the EU have, on average, grown at about the same rate.

The euro may have aided economic integration in other ways, but by these two primary measures, its effect has been negligible.

If economic cycles in the eurozone fail to synchronize, its downturns and recessions will continue to be unduly deep. The reason is simple: Countries that use the euro can't unilaterally devalue their currencies in a bid to attract investment and boost exports. As a result, the return to growth and job creation takes longer. Making matters worse, the European Union's new, stricter fiscal rules -- designed in part to protect the euro -- will make it harder for countries to stimulate their economies with government spending.

Unfortunately, synchronization is where the long-term outlook for the eurozone is the blackest. In terms of future economic development, its members are diverging. Some boast entrepreneurial environments for business that are ripe with innovation, while others continue to struggle with bureaucracy and corruption. Some have relatively young populations and manageable debts, while others are aging fast and staggering under the burden of existing borrowing and pension liabilities. It does not help that these differences largely follow geographical lines.

Given these fundamentals, the economies of the eurozone countries will not fall magically into lock step merely because they share a single currency. If workers could move easily among them, there might be some hope. People would flee weak economies and flock to strong ones, helping to balance wages and unemployment across the eurozone. But even with nominally free migration within the European Union, barriers including licensing, languages, and prejudice still exist. And with anti-immigrant sentiment having risen in tandem with unemployment in some countries, the potential saving grace of the eurozone is also one of its most controversial attributes.

The recent crises among EU members had diverse causes, from bank failures to low tax collections. Taken as a whole, however, the crises served as a late alarm bell from a system that was broken from the beginning. It's still a long way from being fixed.

Image: Dan Kitwood/Getty Images