UPDATE: Re: “China Threatens the World” (11/18/13)

This section of the 11/18 SNS Global Report (SNS: “MALT: A New Killer Category”) has been selected as a critical article for others to read, beyond our membership. – mra

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We are all familiar with the threats China has made against its neighbors, as it works to exclude them from their own islands in the South China Sea.

We have now moved from China threatening foreign corporations with expulsion, if they don’t turn over their most prized inventions, to China threatening media companies with expulsion, if they write critical stories. In real terms, the world has moved from a period of global theft of commercial intellectual property, enforced by such threats, to a period of media intimidation, enforced by such threats.

In the latter case, these have taken the form of a refusal of new visas, and visa renewals, for reporters writing unfavorably about China. Worse, according to the New York Times, Bloomberg has now begun self-censoring, out of fear that it will be ejected from the country entirely or that the government will stop buying its expensive financial terminals – which, of course, require a government permit to be sold.

In 2007, SNS members may recall, we broke the story of China’s organized, government-supported global theft of crown jewel IP, on Bloomberg TV in New York. Later, the story moved to the cover of Bloomberg Businessweek, with the bold header: “Stop Stealing Our Stuff!”

But that was while Michael Bloomberg was mayor of NYC, and Norm Pearlstine was the magazine’s content editor. Now Norm has moved back to Time Inc., and Michael is back running the company and planning a fun-filled Adulation Tour to China in the next few weeks.

Make that, Norm: 50; Michael: -100

Here is part of the New York Times’ coverage on Bloomberg spiking a story following more than one year of ‘efforts by several reporters, after the work had been approved at numerous levels and stages.

“They were adamant that the reasons for killing the story were editorial reasons, not political reasons,” an employee added. When Ms. Hays was asked who had made the decision to shelve the article, she said she and four other editors had, including Tim Quinson, who in September was assigned to the new position of standards editor after an internal review of the May reporting scandal. Ms. Hays said Mr. Doctoroff, the chief executive, had not seen the article.

Mr. Winkler, the top editor, then spoke to four reporters and editors in Hong Kong on a final conference call, which was held on the night of Oct. 29.

The strongest reason he presented was the possibility of Bloomberg’s being evicted from China, employees said.

“He was speaking from a news perspective, not a sales perspective,” an employee said. Mr. Winkler also said he had read a lot about foreign journalists working under the Third Reich and wanted to formulate a strategy for staying in China as long as possible. “He said he was looking at the example of how news organizations worked in Nazi Germany, how they were able to stay there, how they were able to write in that environment,” the employee said.

The message was clear to those in Hong Kong: There was no chance of publication for no.

Since then, Bloomberg has suspended one reporter on the grounds of leaking this information, and several other China reporters have quit the organization, apparently in protest over similar editorial weakness.

At INVNT/IP, we cover all of the global news, every night, gathering stories on nation- sponsored theft of IP. Strangely, since the Snowden Affair, the media stories have shifted from China stealing the world’s commercial IP to the NSA listening to everyone. At first, we thought this was just media Attention Deficit Disorder. But now we’re starting to think that China has done such a good job threatening the world’s media that it is doing exactly what media inside China do daily: self-censoring.

For example: lawyers at the most respected business newspaper in the world recently refused to run a piece until the names of Chinese companies already proven guilty of IP theft were removed. The paper’s editors admitted that they had been “cowed” by China’s threats. They knew, and agreed, that the original story was true and accurate. But, they said, the cost of legal discovery alone – the first step in any claim – was just too high.

Wow. So much for our members getting the real story from that newspaper.

We have now decided that there is a second, perhaps larger, reason for the apparent decline in stories on China stealing IP – even as firms such as FireEye report an increase in this theft: the global media are afraid to write stories that would make Chinese Communist Party leaders unhappy.

China is now working to extend this censorship/self-censorship beyond commerce and journalism and into film, legislation, and every other sphere of influence that affects its interests.

Try to imagine Britain evicting the Wall Street Journal because of a story critical of the UK – or America canceling journalists’ visas because a Chinese reporter wrote a critical story. It’s bizarre. More important, it’s dangerous to free people around the world, as they assume they are getting all the information about China, but are not.

How can we assess China and its actions if our own media are afraid to describe them?

Finally, we know of one major global accounting/consulting firm that made the egregious mistake of telling the truth about China stealing IP in global meetings, with the result that the Chinese delegation (including Huawei) walked out – even as other participants voted the session to be the best of the event. While we have no way of knowing what happened behind closed doors, all of the principals involved were subsequently fired or demoted, and all IP theft programs were halted.

Ouch.

To make some fun in all this, I am tempted to create a Neville Chamberlain Award, to go to people or companies who show their cowardice through policies of appeasement. There are many companies that qualify, including some of the world’s top professional services firms. But there is nothing funny about putting profits ahead of truth, ethically compromising one’s own team and work, and knowingly endangering the welfare of one’s clients in favor of one’s own.

I find it fascinating that the editor from the New York Times, a strongly pro-Israel organ, compared Bloomberg’s actions in pulling a critical China story with how the AP had to behave in pre-war Nazi Germany, in order to be allowed to write anything at all.

Is that where the world is today? Watching and negotiating with a new pre-Nazi Germany? If so, we should all be aware of the fact.

At the moment, it seems the global list of media willing to tell the truth about China has been narrowed to the New York Times and SNS.

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