The Year Mao Met the Smartphone; As Technology Points to the Future, the Political Climate Goes Retro

The Year Mao Met the Smartphone

As Technology Points to the Future, the Political Climate Goes Retro

ANDREW BROWNE

Dec. 30, 2013 8:02 a.m. ET

BEIJING—Elsewhere in the world, people wake up and check the weather forecast. In China, they now open a smartphone app to find out how bad the air is. That, in itself, represents a big advance in the past year, as the government bowed to public pressure to increase transparency about the true extent of air pollution choking Beijing and other cities and to take steps to clean it up.It was a banner year for the intersection of government accountability and technology in other ways, too. Smartphone cameras wielded by digital vigilantes became the scourge of officials trying to sneak around a campaign against government extravagance launched by President Xi Jinping, who took over as head of state in March.

Yet here’s the contradiction at work in China: In a year when technology in the hands of citizens pointed at a new future, the political climate was decidedly retro. The figure who cast the longest shadow was a historical one: Mao Zedong.

His presence was felt everywhere—on TV news broadcasts, in schools and colleges, in government offices and Communist Party gatherings.

Mr. Xi, more than any of his recent predecessors, has borrowed the harsh political control methods of the Great Helmsman, as Mao was known, and used them as tools to battle corruption within the Party and consolidate his power.

China’s younger generation—those not even born when Mao died in 1976—saw Maoism in action with a “mass-line” political campaign aimed at purifying the party’s ranks, including televised “self-criticism” sessions for senior-level cadres.

The most prominent target of the anticorruption campaign in 2013 was Bo Xilai, a “princeling” rival of Mr. Xi, who was jailed for life in September. His trial, ironically, highlighted the way authorities are acceding to public pressure for greater openness: The court issued edited transcripts of the proceedings on China’s Twitter-like service, Weibo.

Mao is one of history’s great survivors. More than three decades ago, the guardians of his legacy engineered his improbable transition to the new era of markets in China. They did this by decreeing that China was now a “socialist market economy.” In other words, there was no contradiction between the doctrines of Mao, to whom markets were anathema, and the capitalist forms that China was then embracing.

But the march of technology has made ideological acrobatics of that kind harder to pull off. A big unanswered question that the past 12 months has posed is whether Mr. Xi can repurpose Maoism in the mobile age.

Or, put another way: Is Mao-style socialism compatible with smartphones?

The market-research firm Canalys calculates there are now 353 million smartphones in China, versus 139 million in the U.S., and that number will reach almost half a billion by 2015—some 40% of China’s entire population.

One of the biggest business stories of the year in China was Apple Inc. AAPL -0.80% ‘s announcement this month that it planned to start offering its latest iPhones on the China Mobile network, the world’s largest with more than 700 million subscribers. Apple shares jumped on the news.

Mr. Xi appears firmly to believe that the fate of the Communist Party is tied up with the preservation of Mao’s legacy.

His bottom line, in other words, is that the mobile age will have to accommodate itself to Mao, not the other way around. As a consequence, the biggest political battles of the year were fought out in the digital arena.

A crackdown on the Internet, ostensibly in the name of combating “rumor-mongering,” effectively shut down social and political debate on Weibo. Among the most prominent casualties were online opinion leaders known as “Big-V” bloggers, including public intellectuals and billionaire entrepreneurs.

An abiding image of 2013 was that of Charles Xue, a white-bearded venture capitalist with more than 12 million followers on Weibo, paraded in front of TV cameras after his arrest on charges of soliciting prostitutes. Mr. Xue hasn’t commented on those charges, but admitted on TV to having been sloppy about checking information he spread online. “Freedom of speech cannot overrule the law,” he said.

Mr. Xi and the entire Politburo Standing Committee rounded out the year by lining up at Mao’s vast mausoleum on Tiananmen Square last week to pay their respects on the 120th anniversary of his birth, bowing deeply three times.

And yet, Mr. Xi also appears aware of the dangers of letting the new Maoism go too far. Media coverage of Mao’s birthday memorials was muted, in line with instructions by Mr. Xi to make the activities “solemn, simple and pragmatic.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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