Tea Leaf Nation

Blanking Out

Is mainland China slowly choking the life from Taiwanese media?

Taiwan-based Want Want Holdings may be best known in mainland China for its tasty rice crackers and flavored milk. But back on the island of Taiwan, this food-cum-media conglomerate whose total revenue last year topped $3.8 billion has left many with a sour stomach. 

Dyspepsia first struck in 2008 when Want Want Holdings chairman Tsai Eng-meng, who according to Hong Kong-based South China Morning Post "built up his fortune through the rice cracker business he established on the mainland in 1994," made his entrée into Taiwan's media world by buying the China Times, one of the island's four major newspaper chains. One year later, Tsai snatched up two Taiwanese cable news stations, which at the time were also part of the China Times Media Group, and formed the Want Want China Times Media Group (which this article will simply call the Group).  

Tsai hasn't lacked for ambition.Tsai could have gained access to an additional 1.2 million households -- giving it control over more than half the island's media, by some measures of market share -- if an attempted merger with cable company China Network Systems (CNS), blocked in February 2013 by Taiwan's National Communications Commission (NCC), and a failed bid to purchase Hong Kong-based Next Media's print publications and television station in Taiwan had been successful. This prospect gave further urgency to a chorus of critics concerned about the effects of a media monopoly on the island's free press. (In an email statement, Editor in Chief Lu Po-hua of WantChinaTimes wrote that Tsai believes he runs the Group "in the spirit of providing a beneficial service to the community.")

Now, after a Feb. 26 knife attack in Hong Kong on Kevin Lau, the former editor of respected Hong Kong paper Ming Pao -- whose Jan. 6 ouster many speculated was linked to political pressure from China -- threats of violence made on June 18, 2013 against Next Media's owner and China critic Jimmy Lai are being seen in a new light, reigniting fears of Beijing meddling in media outlets owned by Taiwanese with business connections to the mainland. 

For many in the island's news media, the peril itself is affecting the way they do business. In a March 4 editorial entitled "Internal and External Media Threats," the Taipei Times, owned by Liberty Times, the latter regarded as advocating for Taiwanese independence from China, warns that the attack on Lau could strike fear in Taiwanese media at a time of "growing Chinese influence." That's especially true because "several media organizations" in Taiwan already have substantial business relations with China or seek to develop them. In Hong Kong's media outlet Apple Daily -- owned by Lai, whom Tsai outbid for the China Times in 2008 -- veteran reporter Yang Tai-xing asked in a Feb. 27 opinion column whether "Taiwan will go down the same road as Hong Kong," adding that Lau's brutal assault hit a nerve with Taiwanese previously "unaware that freedom of speech in Hong Kong was eroding." And in the days after Lau's stabbing, a Taiwanese youth coalition calling itself "I am a student, I oppose Want Want China Times" took to Facebook, the social network of choice in Taiwan, to mobilize a March 6 vigil attended by Taiwan's former Vice President Annette Lu. The group, which participated in the March 18 occupation of Taiwan's parliament and also in a large-scale September 2012 protest against the Group's merger with CNS, wrote on Facebook that the former British colony and Taiwan are both "victims of China's influence," and that Taiwan has "a responsibility and an obligation" to stand with Hong Kong. 

Huang Guo-chang, a law professor at well-known National Chengchi University in the Taiwanese capital of Taipei and himself a participant in the 2012 protest, told Foreign Policy he believes Taiwanese "are definitely worried" that an attack like the one involving Lau "will eventually happen" on the island. Beijing, Huang asserted, attempts to indirectly control media in Hong Kong and Taiwan through corporations and media groups with "huge business interests" in China. Owners of outlets that run articles critical of China, he added, jeopardize their business ventures on the mainland. Huang said concerns over the Chinese government's attempt "to influence Taiwanese's perspective" about China through Taiwan's media are not just limited to the Group. They also extend to some television stations, he said, including pro-independence SET-TV, which in 2012 lost a popular political talk show host, Cheng Hung-yi, known for a strain of pro-independence views commonly referred to there as "pro-localization." At the time, Cheng said he left for personal reasons, though his exit coincided with SET-TV's attempt to gain distribution rights in China for its popular television dramas.

But it is largely the Group's newspapers, magazines, and television stations that today remain the collective target of Taiwan's most vociferous media critics, who fear that a media conglomerate with well-established business interests in China could give Beijing an outlet to meddle in Taiwan's affairs. Shortly after Want Want Holdings acquired the China Times, a 2009 article in CommonWealth magazine, a well-respected Taiwanese monthly, raised eyebrows after it reported that Want Want Holdings' in-house monthly publication in China featured a photo of Tsai meeting with Chinese Foreign Minister Wang Yi, then director of the Taiwan Affairs Office, in December 2008. The caption, the article reads, quoted Tsai saying, "One of the purposes of the [China Times] purchase is to use the power of the media to promote the further advancement of cross-strait relations."

Taiwan's Ministry of Finance ruled that the China Times went too far in March 2012, when it published a series of articles promoting business cooperation with the entrepreneur-friendly province of Fujian, timed to coincide with the provincial governor's visit to the island. The ministry deemed the reports "embedded advertisements" -- a charge the China Times denied at the time -- and fined the paper $13,500 in May 2012 for violating a law prohibiting China from advertising in Taiwanese media. In the months that followed, a wave of China Times editors either retired or resigned. And the NCC's conditional approval in July 2012 of the Group's merger with Taiwan's second-largest cable provider, CNS -- which Tsai purchased for $2.5 billion -- sparked a boisterous September 2012 protest on the streets outside the China Times building. The demonstration attracted between 4,000 and 9,000 participants, including students, journalists, academics, and everyday Taiwanese concerned that Tsai's media group would become a monopoly and a threat to the island's free press.

Lu of WantChinaTimes wrote that the media group would agree to an interview if questions were submitted in writing, Tsai's responses were "published in their entirety," and word length and choice of words were discussed by both parties before publication. (FP refused, due to longstanding editorial policy.) Lu did write that Tsai "advocates peaceful development across the Taiwan Strait." Citing a Jan. 20, 2012, Washington Post article that quoted Tsai saying "China is very democratic in lots of places," Lu added that Tsai declined an interview with Foreign Policy "to prevent another potential instance of public misunderstanding from Mr. Tsai's comments being taken out of context."  

Nonetheless, articles published in newspapers owned by Tsai suggest he would argue that fear of a media monopoly is outdated. On Sept. 2, 2012, a day after the anti-merger protests, the China Times quoted journalism professor Chen Guang-yi arguing, "No one in Europe and America is discussing ‘monopolies.'" He added that such "ridiculous" talk showed "ignorance for the formidable power of new technology" like social media and the Internet. Also mentioned in the China Times article was Peng Huai-en, another journalism professor, who said, "media in a capitalist [world] operates through a market system." If the public is unsatisfied with news from the Group, Peng said, it is free "to respond negatively to its product."

In February 2013, the NCC rejected the Group's planned merger with CNS for failing to meet three conditions the NCC had set on July 25, 2012, including that Tsai and his associates remove themselves from the operation of CtiTV, Want Want's news channel. Four months later, WantChinaTimes published a June 22 editorial skewering an anti-media monopoly bill drafted by the NCC and submitted to the Legislative Yuan, Taiwan's lawmaking body, on the same day the agency rejected the merger. The piece asked why the owner of a food conglomerate could not buy a media company, while a banker could -- Liberty Times publisher Lin Rong-san owns the Union Bank of Taiwan. It also accused the Democratic Progressive Party (DPP), the pro-independence camp, of "anti-Chinese sentiment" as Want Want Holdings "expands its business across the strait" and argued that Taiwan's democracy makes "media monopolization in the country impossible."

For now, debate over Taiwan's media monopoly bill has stalled in the Legislative Yuan as lawmakers wrangle over how to define a monopoly, and the extent to which financial interests should be separate from media companies. Among its 53 provisions, the bill seeks to ban mergers of print and broadcast media that would result in an "overall influence on public opinion comparable to a television viewership rate of more than 20 percent." (A merger with CNS would have given Tsai's media company access to 23.1 percent of the island's cable television subscribers.) Chen told Foreign Policy he believes the bill was drafted specifically to thwart a Want-CNS merger, adding that passage would create regulations "even stricter than before" and would be a "step backward for freedom of the press." Huang, who supports the bill, has called on officials from both major political parties, the DPP and Kuomintang, to explain to the public why the bill has languished for nearly a year. 

For the Group's harshest critics, though, the potential for Beijing to exploit Tsai's media conglomerate to shape Taiwan's coverage of China, merger or no, remains an omnipresent threat. Wu Xuezheng, president of the student group that organized the March 6 vigil for Lau, said that he and his coalition strongly believe Lau's attack, while still under investigation, was instigated by Beijing and has grave implications for press freedom in Taiwan. Huang, while noting there was no "hard evidence that the Beijing government gives direct instructions" to Tsai's media group, said he sees "a very similar pattern" emerging with how Beijing tries to influence media in Hong Kong.

Building an even bigger media conglomerate may prove difficult for Tsai. The Group re-filed its merger application on Dec. 31, 2013, but the NCC again rejected it on March 12, ruling that Tsai's placing 75 percent of the family's shares of CtiTV in a trust did not prove Tsai and his associates had removed themselves from its operation. The next day, the China Times published an editorial denouncing the NCC's decision, calling it "entirely wrong and unfair." At this stage, though, a merger could be a moot point since on Feb. 12, the major shareholder of CNS, MBK Partners, indicated in late 2013 that it wished to withdraw from the deal. 

Huang said he still believes the Group will try to purchase more Taiwanese media properties, though Tsai's intentions remained unclear. For his part, Chen declared himself unfazed by the potential effects of the media group's acquisitions, saying that the Internet offers a "diverse" selection of news sources, and that Taiwanese are "smart" enough to decide for themselves where to get their information.

But Chen's assessment may prove too idealistic. As protests continue to rage in Taiwan over the Cross Strait Service Trade Agreement, which would open up the island to even more Chinese investment, critics wonder whether Tsai's media ambitions, if realized, might further endanger the diversity and color that still exists in Taiwan's fraught press. 

Photo: EPA

Tea Leaf Nation

Mapping China's Economic Activity

Fully half of China's GDP comes from a smattering of major cities, many near the coast.

It's not easy in the Chinese heartland -- at least, not yet. The country's GDP grew at 7.7 percent in 2013 to over $9.1 trillion dollars, which rates as the world's second-largest economy behind that of the United States. Yet China also faces the daunting reality of sharp regional inequality, with metropolitan areas on the east coast far richer than most of central and western China. In an early February inspection trip taken shortly after the Chinese Lunar New Year, President Xi Jinping and Premier Li Keqiang jointly visited rural areas, vowing to close the gap between the east coast and the central and western regions. (In China, such early-year trips generally indicate a policy focus.)

Inspired by a similar map which highlights uneven economic activity in the United States, Foreign Policy compiled GDP figures reported by municipalities across China and found that 35 cities contributed just under half of China's GDP in 2013.

The map (below; click to enlarge) merits two caveats. First, the definition of a "city" in the PRC includes all counties, county-level cities, and city districts it governs. (Chongqing, for example, is a megacity in southwest China with a population of just under 30 million that covers 31,814 square miles, netting in smaller towns that lie far away from the bustling, recognizably urban center.) Second, multiple regions will sometimes take credit for the same dollar of GDP, such that the sum of reported numbers exceeds the top-line national statistic. Nonetheless, the below map provides a revealing look at just how much China's GDP growth machine depends on a few regions:

 

Of those top 35 cities, 20 comprise one percent or more of China's massive GDP. Below is a list of China's one-percenters:

  1. Shanghai (3.80 percent)
  2. Beijing (3.43 percent)
  3. Guangzhou (2.71 percent)
  4. Shenzhen (2.55 percent)
  5. Tianjin (2.53 percent)
  6. Suzhou (2.29 percent)
  7. Chongqing (2.22 percent)
  8. Chengdu (1.60 percent)
  9. Wuhan (1.59 percent)
  10. Hangzhou (1.47 percent)
  11. Wuxi (1.42 percent)
  12. Nanjing (1.41 percent)
  13. Qingdao (1.41 percent)
  14. Dalian (1.34 percent)
  15. Shenyang (1.27 percent)
  16. Changsha (1.26 percent)
  17. Ningbo (1.25 percent)
  18. Foshan (1.23 percent)
  19. Zhengzhou (1.09 percent)
  20. Tangshan (1.08 percent)

Image copyright Foreign Policy Group. Do not reproduce without permission.