War Against Information and Society

From 1949 to 1966, the CCP became progressively more dictatorial in its suppression of the primary values of an information society: the free exchange of ideas and data, promotion of unfettered economic and social innovation, and pursuit of peaceful international policies that would help achieve it. The war against information exchange and creativity permeated the entire fabric of society down to the most personal level. The leaders justified these policies as necessary while the material foundations of the new China were being built. But these material foundations did depend on science, and less than a month after the new Communist government was declared, the CAS was created. Thus there have consistently been two channels of information flow in China that have dominated leadership views: the Communist Party's propaganda and control channel (under which culture was subsumed) and the scientific development channel.

This was particularly evident in the launch by the country's leader Mao Zedong of a campaign in 1956 for critical evaluation of the government: the ‘policy of letting a hundred flowers bloom and a hundred schools of thought contend is designed to promote the flourishing of the arts and the progress of science’, Mao said. The campaign was suppressed almost as soon as it had been put in place and those who spoke out, many from within the CCP, were jailed or persecuted. The sorry fate of the ‘hundred flowers campaign’ was a salutary lesson for anyone in the country seeking to pursue information openness and independent analysis.

The reliance on ideology over scientific information was strongly in evidence in 1958 when Mao launched a radical experiment in economic development called the Great Leap Forward, which was accompanied by a devastating three-year famine causing the premature death of tens of millions of people. Mao's number two and eventual successor as leader, Deng Xiaoping, later lamented that he had not offered any sort of scientific analysis and information to speak out against the Great Leap policy (Vogel 2011). Yet it was also in 1958 that China built its first computer, based on designs and a machine obtained from the USSR.

Between 1958 and 1962, China progressively broke off its relations with the USSR, its main source of advanced scientific information and technology. In 1964, China exploded its first nuclear device, an achievement that was a small miracle given the poor developmental state of the country. This breakthrough was in large part achieved through the involvement of scientists of Chinese origin returning from the United States and through training programmes for Chinese scientists in the USSR between 1950 and 1960.

By 1965, China's economy was dominated by rural livelihoods (completely contained in non-voluntary collective farms, which owned all rural land) and by heavy industry (all in state-owned factories to which employees were assigned on a non-voluntary basis). Illiteracy – an obstacle of the most fundamental kind to an information society – was a defining characteristic of many parts of the country. China had a centrally planned, command economy. Private ownership of business, of homes and of land was illegal. Entrepreneurship was regarded as morally bankrupt. The education system in schools and universities was highly structured, highly ideological and not supportive of creativity and innovation except for trumpeting the superiority of the Communist system and shoring up CCP rule. In the majority of households, a light bulb was the only electric instrument of any kind. (That year China set up its Household Electric Appliance Research Institute.) Imports of foreign goods were highly controlled and mostly comprised commodities and heavy machinery. China's prison camps for political detainees were at least on the same scale as those in the USSR – but probably much more numerous. China's society was highly militarized and the country cut off from most of the world. It was engaged in a military confrontation with the USSR, it had fought a short border war with India in 1962, and it had disputes over most of its other land borders. It saw the United States as its ideological and military adversary because of the US alliance with the Republic of China (ROC) on Taiwan and because China was militantly anti-capitalist.

Worse was to come in 1966 in the form of a new ideological campaign launched by Mao: the Great Proletarian Cultural Revolution. This has been the single most important historical experience after 1949 in terms of defining the policy settings and modes of decision-making for China's information society as they were at the turn of this century. Explanations differ as to the precise causes of the Cultural Revolution, but it was in all practical terms a political struggle between an extremist view of what revolutionary China should be and a more measured, pragmatic, though still Communist and totalitarian view. During the first two years of the Cultural Revolution, the intellectual class in China (the very foundation of an innovative information society) had been branded as ‘stinking weeds’ and systematically repressed through country-wide violence at the hands of organized Red Guard units. In some cases, this included summary executions. By 1967, most universities had ceased functioning, and millions of intellectuals lucky enough to be spared a worse fate were sent to rural areas for re-education – usually to work as farm labourers.

The death toll from ‘revolution actions’ by Red Guards probably ran into hundreds of thousands, according to statistics from just two provinces provided by Yang Su (2011). In 1967, Mao ordered the suppression of the Red Guards movement and a restoration of civil order. The persecution of scientists and scientific workers continued after the mass violence ended. The number of scientific journals in print fell from 400 in 1965 to 20 in 1969 (Brock 2009). International interchange for scientific development was almost non-existent.

China's policies remained highly confrontational, deeply ideological and totalitarian for a number of years. They were not conducive to the development of science and technology even though the strident nationalism of the CCP demanded evidence of scientific progress as proof of the inherent superiority of its ideology. This latter impulse helped protect key programmes through the Cultural Revolution period. For example, in 1967, at the height of the political turmoil across the country, China was able to marshal enough expertise to explode its first hydrogen bomb. The leaders were also protecting computer technology research in the CAS and in 1968 China produced the first integrated circuit (microchip) made in the country. (Integrated circuits are the basic components of most electronic products.) In spite of these niche technological successes in China, there was for the most part little freedom and creativity in the sciences. Intervention (supervision) from non-specialist Communist Party officials was embedded in the fabric of all scientific work units.

In 1969, China was forced to moderate its armed border provocations against the USSR because the latter threatened war, including possible nuclear attack, if it did not. China sought international allies urgently and turned to the United States, which had sensed the opportunity well. This period was the start of the end of China's international isolation. In domestic policy, science and education were early beneficiaries of an easing of extremism. In 1970, Tsinghua University recommenced enrolment in small numbers, one of only a handful of universities to do so (Anon. 1972).

US president Richard Nixon visited China in 1972 and the People's Republic of China (PRC) took the China seat in the UN, displacing the ROC (on Taiwan). The events heralded the opening up of China to relatively limited exchanges with the developed world that would prove to be essential for China's recovery from the scientific and technical stagnation it had imposed on itself. Yet a group of American computer specialists who visited China in 1972 concluded that the country ‘is officially committed to a course of progress which does not permit the establishment of a scientific/technical elite’ (Anon. 1972). This was a period of anti-science in China, when, as part of its Cultural Revolution, the highest value in science was ‘redness’ or quality of communistic ideological purity. Expertise was regarded as a lesser, almost counter-revolutionary value.

It took the death of Mao in 1976 before any reversal of the ideological crusade, including its anti-science and anti-information elements, could begin. His eventual successor after a brief interregnum was Deng Xiaoping, who later referred to the Cultural Revolution as a ‘full scale civil war’, noting that it had ‘wasted the talents of a whole generation of our people’, and that the effects ‘didn't stop with just one generation’ (Deng 1980). A later CCP general secretary, Jiang Zemin, described its influence on the country's technology sector as a ‘catastrophe’ (Jiang 2010). One notable victim of the persecution apart from Deng had been Xi Zhongxun, a revolutionary leader and the father of the CCP general secretary as of 2012, Xi Jinping. Like many other party leaders, Xi the elder had been subject to persecution, jail or other forms of confinement from 1968 to 1975, when the younger Xi was between 15 and 23 years old. Thus, this period was a hugely formative influence on the current generation of Chinese leaders when they were in their late teens and early twenties.

Reform and Opening Up: Technology Please

The new CCP leaders who took power within two years of the death of Mao realized that the CCP had brought the country to economic bankruptcy and a developmental impasse that were self-inflicted. Political persecutions of intellectuals and citizens were scaled back, universities reopened, and international scientific exchanges gathered pace. The leaders launched a policy called the ‘four modernizations’: in agriculture, industry, science and technology, and national defence. This policy, sponsored by Deng Xiaoping, and building on an earlier effort dating back as far as 1963, was announced in December 1978. Although the four modernizations policy foreshadowed some use of foreign technologies and expertise, its essential vision was one of self-reliance or autarky. The policy represented the belief that China could by and large marshal its own resources, and, with just a little help from outsiders, emerge as a powerful country in later generations. The use of foreign technologies had been branded by the leaders of the Cultural Revolution as politically unacceptable. In 1978, China signed its first contracts with leading American firms, such as Boeing (for the supply of modern civil aircraft), and signed a peace treaty with Japan that was a harbinger of large development loans, scientific exchange and some technology transfer from Japan.

The first cracks in China's totalitarian public values around information policy began to appear in 1978. Deng planted the seeds of reform on a wide front, in both domestic and international policy. But all were experiments rather than wholesale commitments. Three of these experiments in particular were to be more significant than others. The first was a decision in April 1979 to set up a special economic zone in Shenzhen (in Guangdong province adjacent to Hong Kong) and three others in locations on the coast. They were to be enclaves of foreign-invested factories that could be isolated legally and socially from the rest of China. (This reform was led in Guangdong by the first secretary of the province, the aforementioned Xi Zhongxun. So his son, the CCP general secretary Xi Jinping, was intimately familiar with the politics of the reform era at the absolute outset in a way that no other current leader has been.) The second was the trial of a new system of economic control in agriculture called the Household Responsibility System, which allowed farmers, all in state-owned collective farms called communes, to sell produce that exceeded state quotas and keep the money for their own household. The purpose was to incentivize higher farm labour productivity. The third experiment, to be very short-lived, was the call for ‘big democracy’.

On this last question, ‘big democracy’, stirrings of interest in a liberalization of the Chinese system by reference to Western standards of human rights burst onto the public stage in 1978. In December, as part of an embryonic round of public protest against the legacy of Mao Zedong, a political activist in China, Wei Jingsheng, described democratization as the country's ‘fifth modernization’, to play off the official formula of the four modernizations (Wei 1978). In his short manifesto posted on Democracy Wall, Wei cited Albert Einstein: ‘Everything that is really great and inspiring is created by the individual who can labour in freedom.’

The authorities suppressed these activities after a relatively short period and Wei was imprisoned for fifteen years. In a speech to the Central Committee on 30 March 1979, Deng Xiaoping provided the ideological orthodoxy to justify continued suppression of the free flow of ideas going forward (Deng 1979). It was the doctrine of four cardinal principles or the ‘four upholds’:

adhere to the socialist road (‘based on public ownership’)
uphold the dictatorship of the proletariat
uphold the leadership of the Communist Party
uphold Marxism-Leninism and Mao Zedong Thought.

While setting severe limits on freedom of exchange of ideas and information, the speech by Deng also gave a positive signal for further technological development. He emphasized that self-reliance supplemented by foreign aid and the acquisition of advanced technology from abroad had always been Communist China's path. He maintained a firm intention to quarantine technological imports from any contamination with Western political ideas. He foreshadowed a ‘vast increase’ in normal contacts with foreigners for scientific exchange and for investment (even though China had no laws permitting such investment at the time). Deng recognized the link between a pragmatically creative ideology based on education and the rule of law: ‘We have neglected the study of political science, law, sociology and world politics, and now we must hurry to make up our deficiencies in these subjects.’ He admitted that China did not have the basic ‘information’ about its own country that it needed for effective policy: ‘for years we haven't even had adequate statistical data in the social sciences’.

In international affairs, Deng visited the United States in January 1979 to mark the formal establishment of diplomatic relations and to promote technology transfer to China. He also used the visit to discuss with US president Jimmy Carter China's imminent invasion of Vietnam. Its purpose was to teach Vietnam a lesson for invading China's political ally, Cambodia; for allying itself militarily with the USSR; and for the expulsion of some ethnic Chinese. Though the invasion was short-lived and limited in scope, China kept up military and geopolitical pressure on Vietnam for a decade. This military action showed that, for China, the big decisions on reform, which depended in part on peaceful international relations, were not ever going to be big enough to alter its strategic calculations of when to use military force to defend key geopolitical interests.

Even though China had launched its ‘opening up’ policy in 1978, it moved slowly at first on what information was allowed in. By 1983, the floodgates had begun to open. While there were still many banned publications, a number of ideologically acceptable or politically neutral foreign publications began to be printed by local publishers. The best-selling foreign book in China in 1983 was Alvin Toffler's The Third Wave (1980), which canvassed the transformation of the global political economy and human society under the influence of information technology, access to space, and a number of other transformative technologies. Both Deng and the premier, Zhao Ziyang, are reputed to have studied the Toffler book. Its arguments that the Chinese leaders found persuasive related to the revolutionary role of new information technologies in determining power relationships in the world. Toffler argued that the countries most likely to lead the world in power terms would be those that mastered the new technologies. The Toffler book's influence at that time was so profound that two decades later the People's Daily (03/08/2006), China's leading official newspaper, named Toffler among the fifty most influential foreigners in modern Chinese history.

This was the environment in which the leaders decided in 1983 to give the electronics industry a much higher priority and committed to increasing its output eight-fold by the year 2000 (Jiang 2010). They were setting goals for this industry to outperform the rest of the economy by at least 100 per cent. It was in January 1983 that Time Magazine named the personal computer ‘Machine of the Year’ (instead of naming a person of the year), with Apple producing its first highly popular model (the IIe) in the United States and elsewhere; Microsoft Windows was first released; and software for intranets became commercially available. At the time, personal computers, already available in Hong Kong and Taiwan in early models as consumer items for the household and office, were very rare in mainland China and certainly not available anywhere in the country for legal private purchase.

When China sought in 1983 to embark on its first information revolution (which it saw at the time as limited largely to the technology and the machines), it was in the grip of a sharp political power struggle between reformers and conservatives. In 1983, Toffler's book had been branded by the conservatives as ‘spiritual pollution’ as part of their campaign against the reformers and against most things foreign. The flood into China of Western ideas, people and books was shaking China's political system, and major planks of Communist ideology, to the core.

Deng was determined to shake China up. In 1984, some Chinese companies were allowed to issue shares for private ownership, a practice previously seen as anathema to Communism. Deng spoke at the inauguration of the newspaper Economic Information Daily, emphasizing the link between new information resources and the four modernizations, and on another occasion he was reported to have said that every child in China should learn computer skills (Qu 2010). On the political stage, he called for the convening of a Special Conference of the CCP, at an unspecified date but two to three years ahead of the scheduled changeover date, to engineer a large number of retirements from the Politburo and Central Committee in favour of the appointment of younger and more liberal people.

The constitutional coup by Deng with the Special Conference, held in 1985, ushered in an even more stormy debate about the country's values. Economic reforms were broadly accepted as necessary, but there was great consternation in the Party over the political significance of the measures. Radical political reform premised on non-Communist values was emerging as a possible vector for China. One of the key campaign themes of the conservatives was the idea that China was being subjected to ‘spiritual pollution’ from the West that was contrary to the ethical foundations of Communism.

They were right. Private entrepreneurship in Chinese-owned industry was making its first comeback. In 1986, the CAS invested RMB200,000 (around US$25,000 at the time) to fund eleven people in a start-up called the New Technology Developer Inc. This was the forerunner of the Legend Group, which subsequently became Lenovo (now the world's biggest producer of personal computers). In 1987, the first connection by a Chinese institution to the internet occurred. The Institute of Computer Application in Beijing set up the China Academic Network (CANET), operating only for email, and routed through Karlsruhe in Germany (Chen and Chu 1995).

Information Economy without Freedom of Information

In 1987, the concept of an open information economy was adopted by CCP leaders trying to reform China's application of Marxism and the command economy. For those opposed to a more open information flow, the priority was about retaining dictatorship and thought control, opposing Western influences and ending the political careers of the more liberal Party members. This was a struggle between advocates of information and advocates of ideology. By 1987, the political struggle began to turn in favour of the orthodox ideologues. The more liberal CCP general secretary Hu Yaobang, appointed to the top leadership only in 1981, was forced to step down because of his alleged mishandling of student demonstrations that began in late 1986. Understanding the deep divisions within the leadership, students in the universities were beginning to revolt. The same year, the vice-president of the China University of Science and Technology (CUST), Fang Lizhi, a well-known physicist, was dismissed from his post and expelled from the Communist Party. Early in 1989 he published an article severely critical of the Chinese government: ‘socialism of the Lenin-Stalin-Mao variety has been quite thoroughly discredited’ (Fang 1989). He referred to the May Fourth Movement of 1919 in China, in which the issue of modern technology had been an issue. He said that the ‘slogan “science and democracy” is once again circulating, and becoming a new source for hope among Chinese intellectuals’. Fang made a blistering attack on the anti-science policies of the CCP. He explained that ‘Ignorance serves dictatorship well. The true reason for the destruction of education is apparent enough.’

The intensity of this contest and the severity of its effect in China at the time can be quickly gauged from the signature events in the most iconic political locations in the country in a two-month period from 15 April to 4 June 1989. On 21 April, the eve of the official funeral for deposed general secretary Hu, large overnight student demonstrations triggered similar demonstrations and sit-ins in the following six weeks throughout China, with calls for humanism, Western-style democracy and an end to official corruption. Workers joined the protest actions. Tiananmen Square in the centre of Beijing, adjacent to the leadership compound of Zhongnanhai, was occupied by demonstrators for over a month. During a meeting in the Great Hall of the People (on one side of Tiananmen Square) that the leaders hoped would force a backdown by the protesters, one of the student leaders, dressed in pyjamas, berated and humiliated Chinese premier Li Peng in scenes that were captured on national television – an event the likes of which had not been seen since the Cultural Revolution. On 20 May, the government declared martial law, mobilizing around 250,000 troops to enter the capital. On the evening of 3 June, Deng and Li ordered troops to clear Tiananmen Square. This started a military and police repression of the democracy movement across the country, killing hundreds of unarmed people and arresting thousands. Hundreds of students and other protesters managed to flee from China. Western countries imposed a deep freeze on relations with it and foreign investment in the country dropped sharply. The general secretary of just two years standing, Zhao Ziyang, was demoted and put under house arrest. His purge was especially significant because he was the second leader of the CCP forced to step down in two years. He remained under house arrest until his death in 2005, but succeeded in breaking the information ban imposed on him by recording a memoir to audio cassette tapes that led to its publication in the West in 2009 (Zhao Ziyang 2009). Zhao's former secretary, who accompanied him to Tiananmen Square in a famous last effort to convince the protesters to leave it, was Wen Jiabao, who subsequently became premier of China from 2003 to 2013, and who was later one of the leading advocates of informatization in the leadership.

The events were so momentous that Chinese leaders were obliged to propagandize their view both of the demonstrations and of the issues they had raised. The leadership views were firmly imposed on the public consciousness of the country, including through trials of some of the demonstrators and a massive propaganda campaign. The task was made easier by the Communist Party's control of mass media, particularly television. The main lines dictated from the top were (a) stability is everything; (b) public protest intended to bring about political reform will not be tolerated; and (c) the Communist Party leadership will bear almost any cost internationally and domestically to ensure the survival not just of the Party but of its specific leaders at any time.

The replacement for Zhao as CCP general secretary was Jiang Zemin, the former minister of the Ministry of Electronics Industry (MEI), who in 1983 had loyally followed Deng down the path of making that sector grow twice as fast as the rest of the economy. At the time, Jiang was a Politburo member and Party secretary in Shanghai. The accession of Jiang to the top CCP post ensured that informatization had a champion at the highest level of Chinese politics from 1989 until 2005. But Jiang was chosen because of respect in the leadership for his smooth suppression of dissent in Shanghai, a course of action that was the very antithesis of an open information society.

Once again, as in the 1958 suppression of the ‘hundred flowers’ campaign, the CCP had made the intellectuals and freedom of information (FOI) the enemies of the state. The suppression was propagandized around the country as the highest virtue. This led to an exodus abroad of some of the country's best talents and most spirited reformers. Hundreds had fled in the immediate aftermath of the use of force in Tiananmen Square, but tens of thousands followed in the decade afterwards, largely by taking up scholarships for foreign study. Fang Lizhi, former vice-president of the country's leading S&T university, who had sought asylum in the US embassy on 6 June 1989, was finally allowed to leave the embassy and China one full year later to travel to self-imposed exile in the United States.

The lesson for all Chinese from these momentous events, as from the earlier victimization of intellectuals, was that over forty years, the Communist Party was, at a high moral level, both anti-science and anti-information. The lesson for Chinese leaders at all levels in politics and science was that their personal liberty was at risk if they advocated a ‘science before the Party’ approach.

Not everything in these few years was retrenchment. For example, in 1989, the leaders approved the creation of the China Electronics Corporation, as a state-owned spin-off from the MEI. It would later become the biggest Chinese electronics company, including in the area of military informatization and state security. In 1990, Legend launched its first original PC in China, transforming itself from importer to manufacturer. That year, the CUST got approval to initiate a PhD programme in computer software. And as a clear indicator of the return of capitalism, the Shenzhen Stock Exchange was set up and the Shanghai Stock Exchange reopened, having been closed since the CCP came to power in 1949. In 1991, China made the extraordinary decision to allow Taiwan to join the recently formed APEC group. Taiwan was already an important source of investment for China. The argument was made that since this was an economic grouping, and not formally an international organization, Taiwan could be admitted as an ‘economy’. Also in 1991, the Institute of High Energy Physics (IHEP) was the first organization in China to lease a direct international line on the internet that connected it to the Linear Accelerator Center at Stanford University in the United States.

Consolidating the Information Economy

As profoundly negative for the future of the information society ambition as the political turning points of 1989 were, the subsequent decade revealed a space for innovation, liberalization and pluralism that would have defied the imagination or expectations of most observers in the immediate aftermath of the events of that year. The turn was evident in 1992 with the rehabilitation of Hu Qili, one of the most important party leaders demoted in the 1989 purge. He was appointed to the post of deputy minister of the MEI and a year later to minister, the post that Jiang Zemin had himself occupied a decade earlier. The leaders were making an unmistakable recommitment to the need for talented, energetic leaders who understood the political implications of informatization and reform.

The associated government-wide decision that year was the elevation of the information economy to the status of ‘important objective’. A National Informatization Joint Conference (NIJC) was set up to lead the effort. The CCP appeared to be moving quickly with the related decision one year later to set up a new corporation, China Unicom, to manage mobile phones independently of China Telecom, the state-owned body. Also in 1994, China established a National Informatization Expert Team and took the first steps towards accessing the internet. The Sino–US Joint Committee on Science and Technology and the American National Science Foundation agreed that the National Computing and Networking Facility of China and the CAS could link to the internet. On the legal side, China introduced its Regulation on Security and Protection of Computer Information Systems and made corresponding changes to its criminal law. Jiang Zemin met Microsoft founder Bill Gates, though this first meeting was not a happy one because of Jiang's irritation with Gates’ insistence on free market economics and because Microsoft had developed a new Chinese version of Windows in Taiwan.

The technical and infrastructure advances continued apace. On 1 January 1995, China Telecom made the first public internet connection to the United States through the American telephone company Sprint. Its bandwidth was significantly lower than that made between Taiwan and the United States in August the same year (64k compared with the 1,544k link). In March, the CAS linked its branches in Shanghai, Hefei, Wuhan and Nanjing through the internet, thus making the first effort to extend internet coverage outside Beijing and Shanghai. In May, China Telecom started work on a national backbone network for Chinanet. In August, the Shuimu Qinghua bulletin board system (bbs) built in the China Education and Research Network (CERNET) went into operation. It was the first internet-based bbs (electronic bulletin board system) in the mainland. In terms of domestic research in information technology, the CUST set up the country's first National High Performance Computing Center. Bill Gates visited Jiang Zemin in China a second time. Gates’ visit was a clear portent of the leaders’ determination to co-opt the most advanced IT corporations from the West in their pursuit of informatization. This commitment was further demonstrated by leaders’ acceptance of the opening in China in 1995 of an office to lobby for the protection of the collective interests of major US information technology corporations operating there. This office, operating formally as a non-profit under the rubric of the United States Information Technology Office, became a powerful force for harmonizing China's industrial policies with what might loosely be called international best practice (as seen from the IT corporate perspective).

The same year, China engineered another dramatic chilling in its relations with key foreign partners in its information economy ambition when it sought to influence the evolution of politics in Taiwan through military pressure, conducting what it said were test launches of its medium-range ballistic missiles to splash down in sea areas adjacent to Taiwan. The tests were repeated in March 2006. China was reacting to a series of statements by Taiwan's president, Li Teng-hui, about the island's political status and associated US statements and decisions.

In 1996, a major breakthrough in informatization policy was imminent. That year, the leaders decided to upgrade the pre-existing joint conference for national informatization (the NIJC) and set up the SILG within the State Council. The head of the new SILG was a vice-premier, as with the NIJC, but the new group was to meet once or twice per month instead of twice per year as before. In the same year, China also set up a Working Group on Information Security that reported to the SILG (Qu 2010). Also in 1996, China had its eye on stepping up aspects of its military informatization. Communist Party general secretary Jiang Zemin told a military audience that ‘seizing information dominance’ would become a ‘focus in warfare’ (Jiang 2010).

In February 1997, Deng Xiaoping died, without any immediately visible effect on policy since he had been almost fully retired for five years. But his dualistic political legacy on opening and reform, while containing threats to the information dictatorship around Party rule, was intact.

The structural reforms around the information economy began to bear fruit in 1997, with the first National Conference on Informatization approving plans for informatization of the country. (This conference was more broadly based than the similarly named NIJC.) The conference was held in Shenzhen and took a fateful decision not to follow a Western pathway to informatization but to follow a distinctly Chinese path by emphasizing the link between informatization and the more traditional Chinese priority of industrialization (Qu 2010). In contrast, the more liberal-minded Hu Qili took the view that ‘informatisation takes the lead on China's industrialisation’ (Duan 2012). The distinction was important. By linking informatization and industrialization as a pair, the leaders were providing a way for the more conservative forces to hold back the claims of the informatization champions and maintain a measured pace of industrialization that most leaders saw as quite distinct from, rather than depending on, informatization.

The 1997 conference was something of a late arrival. It was convened to approve a plan that had been developed in 1995 under the title ‘National Informatization Development Plan’, which reportedly set out very general objectives for 2010. The document declared the internet to be a part of the state information infrastructure and proposed the establishment of a State Internet Information Center and Internet Exchange Center. The body to emerge in 1997 was the China Internet Network Information Center (CNNIC), located within the CAS, to be the ‘builder, operator and administrator of the infrastructure for China's information society’ (www1.cnnic.cn). The conference called on the government to ascribe to the electronic information industry the status of ‘pillar of the national economy’; for the creation of a talent pool of IT professionals specializing in research, development, production and applications; and for the popularizing of IT awareness and education. This was not a comprehensive plan for the informatization of the economy but rather a plan to bring the information technology industry to the forefront of economic planning for the first time.

That year, China tightened its security grip on the internet by setting up a Public Information Network Security Monitoring Bureau. The criminal law was further tightened to cover use of the internet for fraud, theft, graft, embezzlement and theft of state secrets, among other acts (Qu 2010). One of the earliest advances in informatization for social welfare came when Hewlett Packard helped the People's Liberation Army (PLA) develop the country's most advanced Health Information System, later adopted in major hospitals.

In the world of politics, two historic events with significant implications for China's information economy occurred in 1997. The first was the resumption of Chinese sovereignty over Hong Kong. It showed, or would come to show, that the country that had so ruthlessly imposed an information dictatorship was now prepared to tolerate or live with information pluralism of a kind, under the formula ‘one country, two systems’, devised by Deng fifteen years earlier to seal negotiations with the UK on the return of Hong Kong to Chinese sovereignty. The higher political import of the formula was that it would also apply in the future to Taiwan, if it would agree to peaceful reunification with China. When China resumed sovereignty of Hong Kong in 1997, it was a momentous event in its own right, but for China's leaders it also held out some promise of a similar resumption of sovereignty over Taiwan. The second historic event was the alteration of the CCP constitution to allow business people to join the party. The CCP had become the place to do business, and it was around the mid-1990s that leading political figures came to be identified more by the general public with significant business interests, including by corrupt means.

The CAS set up its own leading group on informatization in 1997, well ahead of other sub-national entities. The CCP leaders commissioned a report from the CAS on ‘The Coming of the Knowledge-Based Economy and Construction of a National Innovation System’, which was completed that year. This report prompted action by the government in the areas of R&D, intellectual property rights (IPR) and venture capital (Suttmeier and Shi 2008). The turnkey role of the United States in China's informatization came into further relief with the launch in 1997 of the first web portal, itc.com.cn (later to become sohu.com), by a Chinese-owned company, albeit one incorporated in Delaware in the United States.

The whirlwind of reform in favour of informatization was about to gain in intensity. In March 1998, the new premier, Zhu Rongji, came to office and unleashed massive structural reforms in the economy. There were four planks to the radical shake-up: strong economic leadership to sweep away the last vestiges of doctrinaire socialism; radical reform of the armed forces and defence industry; strong legal leadership to build durable foundations for a stable market society; and the expansion of democracy. China had a new set of public values: to become rich, strong, democratic and civilized (Austin 2001). Notably, the government set up a new Ministry of Information Industry (MII). This was a turning point in leadership attitudes to the information economy. It saw the merging of two ministries (Electronics Industry and Posts and Telecommunications) and other agencies (including notably elements of the China Aviation Industry Corporation and the China Aerospace Industry Corporation). The MII also took over the role of the pre-existing SILG office, which had served as the interdepartmental coordinating body for informatization policy. The MII was established to promote reform of the telecoms sector, to bring about the separation of the functions of government and enterprises, to separate management of post offices and telecom offices, to restructure telecom systems and to reform the associated SOEs, such as China Telecom.

The security agencies were tracking with the reforms. In 1998, the Ministry of Public Security (MPS) launched a pilot for the Golden Shield project, to begin to work towards setting up a capability for monitoring all computer networks in China for a variety of purposes (political control, crime prevention, public order and protecting social morality).

That year, Microsoft set up the first foreign-invested ICT research lab in China, called Microsoft Research China (renamed in 2001 as Microsoft Research Asia). It was later to become the company's largest basic research institution outside the United States. Intel opened its China Research Centre that year too. The China Patent Office was renamed the State Intellectual Property Office (SIPO), a government agency directly under the leadership of the State Council. The first of twelve annual white papers on IPR in China was published. The 1997 CAS report on the knowledge economy led to the Knowledge Innovation Programme (KIP), to be piloted by the CAS beginning in 1998; five of its nineteen programmes set in motion between 1999 and 2001 involved ICT-related sciences, and the other fourteen would not have been possible without advanced computing (Suttmeier and Shi 2008). A related measure, one year later, was the decision to force the country's research institutes to become self-supporting by relying much more on market forces.

The constellation of private sector interests that would come to define much of China's information society began to shine more brightly in 1999 when Sina.com, an internet services company, was established through the merger of a Chinese company and the US-based Sunnyvale (operating the largest Chinese-language news site in the world for Chinese speakers in the United States, Taiwan, Singapore and elsewhere). In that year, Sina quickly overtook Sohu as the platform of choice, a trajectory and position that it has maintained since. In Chinese, the name of Sina is xinlang, which means ‘new wave’. It was also in 1999 that two Chinese entrepreneurs returning to China from the United States set up EachNet, an eBay equivalent; and OICQ (an instant messaging service modelled on an AOL service called ICQ and MSN Messenger) was set up. Table 2.1 shows a short list of internet start-ups to 1999.

Table 2.1: Start-up dates for public Chinese internet platforms, 1997–1999

Brand name on launch (Brand name now)	Platform type	Year
Itc.com.cn (Sohu)	Web portal	1997
Netease (163.com)	Email and web hosting	1997
Sina.com	Web portal	1999
Alibaba	Business-to-business global sales	1999
EachNet (bought by eBay in 2013)	Person-to-person sales	1999
eLong	Travel information	1999
cTrip.com	Travel information	1999
OICQ (Ten Cent QQ)	Short message service	1999

Internal security remained a primary focus of leadership attention. In 1999, the year that the Yahoo! search engine became accessible in China, the MII and the MPS jointly set up a network security management centre to devise rules for electronic technology, information transmission and reception. The Hong Kong office of these two agencies, along with the local branch of China's Ministry of State Security (MSS), actually issued a call for all state and private organizations not to connect their systems to the internet. MII acted on fears that imported computers and software would be affected by Trojans or backdoors, and called for the development of domestically made computers and software systems to be increased. In both Taiwan and China, patriotic hackers were regularly penetrating the other side's computer systems.

The increasing openness of China to the information society in the last years of the decade received a serious setback in July 1999 when a nationwide group, Falun Dafa or Falun Gong, with followers estimated in the tens of millions, staged a demonstration of around 10,000 people outside the leadership compound in Zhongnanhai in Beijing. The movement was not political in intent, but rather an outgrowth of a resurgence of nationwide interest in China's history and culture, particularly various traditions of qi gong. Within days of the surprise demonstration on the northwestern corner of Tiananmen Square, the country's internal security apparatus was mobilized against it and the organization was banned. The Party leadership's overreaction to the Falun Gong movement can perhaps be attributed in large part to an overestimation of that movement's informational potential. This may have been fuelled by rumours and statements from the Falun Gong leader that the internet had played a central role in getting out the 10,000 demonstrators. But by the next year, the movement was streaming its radio live over the internet to make it available in China (Bell and Boas 2003). The leaders’ suppression of information about Falun Gong and membership of it was subsequently felt throughout China – in schools, universities, the CCP and the armed forces. Members were persecuted, jailed and on occasion tortured.

China's leaders began to pay a lot more attention to information warfare (IW) in 1999 after the United States bombed the intelligence and communications wing of the Chinese embassy in Belgrade in the NATO campaign against the Former Yugoslavia. Jiang briefed the CMC on the critical role played by high technology in that campaign (Jiang 2010). It was later revealed that Chinese communications staff in the Chinese embassy were rebroadcasting command and control information for the defending Serbian forces. It was also only later that reports began appearing that the United States had successfully used advanced cyber warfare techniques, including electronic warfare techniques, to manipulate power and telephone grids in Belgrade. According to one source, the PLA set up the first cyber warfare units in its headquarters in 1999 (Hwang 2012), though they had existed earlier in lower-level units. The precise purpose of these units (in terms of what sort of IW activities they engaged in) has not been revealed. An authoritative 1999 assessment of China's military cyber capabilities concluded that ‘the available evidence suggests that the PLA does not currently have a coherent IW doctrine, certainly nothing compared to U.S. doctrinal writings on the subject’ (Mulvenon 1999). The capabilities ‘do not match even the primitive sophistication of their underlying strategies, which call for stealth weapons, joint operations, battlefield transparency, long-range precision strike, and real-time intelligence’.

Summary Assessment of Leadership Values in 1999

By the end of 1999, the information society as an idea was clearly in play in China but the leaders had not committed to it. They had as yet only articulated the goal of becoming a knowledge economy or an information economy. As a result, all of the ideal values for achieving the broader vision of an information society were not particularly prominent. Here is a summary evaluation of the mismatch in 1999 between the actual values of China's leadership and each of the ideal values needed for an information society, as listed in table 1.2.

National information ecosystem

Freedom of information exchange:

The leaders were, at that time, prepared to tolerate an explosion of information exchange hitherto unimagined in China. This change had been forced on them by new social mobility within China and outside it; by a flourishing of print media and TV programming; and by the introduction into China of modern ICTs, especially mobile telephones (offering sms), computers, the internet (electronic file transfer, emails and bbs), and the world wide web (search engines). Yet several substantial exceptions to the more liberal environment for information exchange remained. The crackdown in 1999 on Falun Gong made it plain that the CCP would continue to intrude in matters of personal conscience of the most innocuous kind if they led to what looked remotely like organized activity on a mass scale that was not directly controlled by the CCP. Most importantly, there was no freedom of conscience when it came to political affairs that might even remotely impinge on the continued rule of the CCP. This even extended to scientific work that might run against the public lines of government policy. Thus, there was only freedom of information exchange within China in 1999 for personal affairs of no possible public consequence, and in pure science. There had been considerable liberalization in information exchange for economic planning, for applied sciences and for social sciences, with new levels of tolerance for open information. One positive example in this area was the blossoming of information about the degraded natural environment in China through industrial pollution. But for the most part, state secrecy and state ideology were the dominant values.

Protection of information exchange:

The leaders’ values on the circulation of information make it plain that in 1999 they did not place a high value on the principle of protecting the exchange of information. On the contrary, they showed a persistent commitment to punishing those who transgressed CCP guidelines. Since the legal system in China was weak at the time, there were few protections of any kind for citizens, activists or researchers in their confrontations with the CCP apparatus over access to information. Even if information that was circulated in no way impinged on political power, citizens had few protections. There were, however, signs of counter-currents, with the State Secrets Bureau in 1999 commissioning the country's first research on FOI regimes in other countries.

Trusted information:

The leaders faced a dilemma on this front. On the one hand, the original attraction of the idea of an information economy for Deng Xiaoping was the need for China to have basic and accurate statistics and informed analysis about the entirety of life in China. This demanded accurate information that could be protected from ideological bias. By 1999, Chinese leaders were insisting on objective information in state planning. Yet, with the maintenance of heavy ideological control of content and tight control of mass media where possible, even on personal issues, there could be little confidence in much of the information in circulation in China. The state of play in the field by the end of the decade was captured in complaints by senior officials of falsification and exaggeration of economic data by their peers keen to preserve careers by being seen to meet economic targets.

Innovative information economy

Transformation intent:

This was a supreme value for China's leaders. They wanted the country to become rich, strong, democratic and civilized – on a par with the developed countries. Yet, for political reasons, they were committed to a path that emphasized experimentation and gradual reform. This meant that bureaucratism and a slow pace of change were the norm. However, the leaders were capable of breakthrough decisions and there had been striking examples of these in the previous twenty years: the decision to set up special economic zones, the crafting of the political principle of ‘one country, two systems’, the decision to admit entrepreneurs to the Communist Party, the decision to allow public access to the internet, the initial listing of Chinese corporations on the New York Stock Exchange, and the agreement to United States terms for China to enter the World Trade Organization (WTO). Foreign corporations and governments also played a massively important role to enable such shifts in leadership values on the economic front, especially on the issue of closer integration of China into the global economy. By 1999, many indicators on the technological side in China's information economy were in take-off mode, with notable exceptions in industry being the software and semi-conductor sectors, which were verging on the negligible.

Innovation system:

It was only towards the end of the 1990s that the leaders began to accept that a command economy, with strongly centralized ideological and social controls, was antithetical to innovation on the level needed to achieve an advanced information economy. The leaders had arrived at the turn of the century with a set of experiences in innovation policy that had given a central role to experiments or surge campaigns in dedicated (narrow) industrial or scientific sectors. There was no strong commitment to rapid reform of incentives or key institutions, though there was a deepening recognition of the need to engage market forces more directly. There was only reluctant acceptance of foreign expertise as the driver. Most leaders were clinging to the dream of self-reliance (a techno-nationalist vision). This was the belief, present at the start of the opening-up policy, that China only needed a little bit of stimulus from outside the country, and the superiority of its socialist system would kick in and carry China the rest of the way.

Innovator class:

The brain drain from China was probably close to a forty-year peak around 1999. The phenomenon had been debated at the highest leadership levels for at least fifteen years. This reflected the lack of commitment by leaders to the value of developing an innovator class through deployment of competitive working conditions and an attractive social and intellectual environment. After 1949, China's entire economic history had been about a command economy, institutional targets and an education system that operated in an ideological straitjacket. There had been so little private sector development in the country that this was not a source of innovators. The leaders had placed considerable faith in a strategy that comprised sending scientists and scholars abroad to study, expectations for transfer of technology to China from foreign-invested firms in the country (including their R&D labs), and gradual improvements in tertiary and research institutes in the country. They had also relied on surge programmes for talent development in selected areas of technology, such as electronics and IT. The evolution of an innovator class was stunted by the leaders’ unwavering commitment to CCP control of leadership posts in key research institutions and universities. Yet by 1999, entrepreneurship in information technology and services was alive and well in spite of leadership preferences. Completely new forms of internet-based business had emerged and the leaders did not discourage this.

Global information ecosystem

Strategic stability:

From the earliest days of the reform period, China's foray into the knowledge economy was dependent on its diplomatic strategies and borrowing from foreign experts. By 1999, the leaders remained as firmly convinced as Deng Xiaoping had been in 1978 that advanced technology determines national power. Since China was badly lacking in it, then the only solution was to work cooperatively with foreign countries to get it. The leaders were highly committed to the idea that China should promote strategic stability, meaning peaceful and advantageous relations with the major economic powers and with foreign private investors, in order to underpin as rapid a modernization of the country as possible. They were, however, reluctant acceptors of the existing world order. As they modernized their armed forces and normalized their maritime boundaries, they were encountering strong suspicions from neighbouring countries about China's growing military and economic power. The leaders recognized a need to try to calm those anxieties. They saw themselves increasingly obliged to respond to the US drive for enduring pre-eminence over all other states in military technologies. While the leaders had committed fully to a high-tech vision of future warfare over the longer term, the extent of their potential commitment to military informatization was still being debated. The PLA by 1999 had started to develop only limited cyber war ideas and basic capabilities (beyond classic signals intelligence).

Bridging military divides:

Part of China's peaceful development strategy was to oppose military alliances. But since the leaders placed a high premium on preventing the permanent separation of Taiwan from China, through use of military force if necessary, the strategic stand-off with Taiwan and its military ally, the United States, continued. China had from 1992 to 1995 promoted a series of peaceful gambits towards Taiwan, but this had flared into sustained military tensions between July 1995 and 1999. China's leaders were prepared to alienate Taiwanese investors and forego better access to advanced information technologies from Western countries through this occasional sabre-rattling, but in fact they found that foreign investment in China's ICT sector was continuing apace in spite of it.

Interdependent informatized security:

China was committed in practice to cooperative norms in economic and technological aspects of the global information economy. It had shown an emerging rhetorical commitment to joint problem solving, but leadership values in this area in 1999 were limited almost totally to the idea that richer countries were obliged to help poorer countries (like China) acquire advanced information technologies. There was a very powerful ‘China first’ strategy. China was supplying low-interest development loans to some poor countries, but saw itself as so backward that it had to concentrate on its own national development.