michael gurstein on Wed, 20 Jul 2011 23:41:12 +0200 (CEST)

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<nettime> Vancouver Sun: Beijing outclasses London in managing Murdoch

Jonathan Manthorpe's coverage of Asia is the very best reason to subscribe
to and read the Vancouver Sun!

And this one is a beaut!



Media tycoon's lust for a piece of Chinese market was so all-consuming that
authorities there easily milked his companies of their skills
By Jonathan Manthorpe, Vancouver Sun July 20, 2011
A screen grab image taken from television on Tuesday shows News Corp. chief
Rupert Murdoch and his son, James, giving evidence to a Parliamentary Select
Committee on the phone hacking scandal, as Rupert Murdoch's wife Wendi Deng
(centre) looks on.

When dealing with Rupert Murdoch, the British political and chattering
classes should have taken advice from the Chinese.

Beijing quickly saw in the 1990s that when "the Dirty Digger" comes calling
it is a good idea to lock up your wives and daughters, keep a tight grip on
your wallet, and don't let him over the doorstep.

But the political and propaganda chiefs of China's Communist Party soon took
their view of Murdoch and his multifaceted media empire News Corp. to the
next level.

As in their dealings with so many other foreign business people, the Beijing
authorities saw that Murdoch's lust for a place in the China market of 1.3
billion people was so allconsuming he could easily be led around by the

Murdoch and his son and apparent heir, James, poured about $2 billion into
television and online enterprises in China.

They lost at least half of that while the Chinese authorities milked the
Murdoch companies of their skills in not only modern media communication,
but also in methods of content control and censorship.

Last year, Murdoch and son admitted they had hit "a brick wall" in China and
sold off their three remaining television channels, Xing Kong, Xing Kong
International and Channel (V) Mainland China, as well as their Fortune Star
Chinese movie library to an investment fund controlled by the Beijing

The irony is that as the Murdochs withdrew from China they fixed their
attention on taking full control of British Sky Broadcasting, a bid that has
now gone down the tubes in the muck and mire of the scandal around phone
hacking by employees at the now defunct London tabloid, News of the World.

Murdoch's attempt to get into the Chinese television market started badly.

When he bought the Hong Kong-based Star TV satellite service in 1993 he
proclaimed in a speech brimming with hubris that this medium would be "an
unambiguous threat to totalitarian regimes everywhere."

But Murdoch had already been taken for a ride. He bought Star TV for more
than $500 million from Richard Li, son of Hong Kong's tycoon of tycoons, Li

Somehow in the excitement of making the deal it failed to get mentioned that
Star TV's output in China was totally pirated and there was no income.

Within a month, Beijing made clear its view of Murdoch and his crusade to
bring the light of open information and ideas into the dark corners of
China's authoritarianism.

The ownership of private satellite dishes was banned.

The speed with which News Corp. changed tack and became a cringing
supplicant at the court of Beijing was astonishing.

Murdoch sold the Hong Kong newspaper, the South China Morning Post, to a
pro-Beijing Malaysian businessman, who has tempered its previously vigorous
coverage of China.

Murdoch's book publishing subsidiary, HarperCollins, produced a biography of
China's paramount leader Deng Xiaoping written by his daughter - and
business tycoon - Deng Rong.

And to reinforce his new attitude toward Beijing, Murdoch ordered
HarperCollins to back out of a contract to publish the memoirs of Hong
Kong's last governor, Chris Patten, an account that was bound to anger the
Chinese government.

In 1994 Murdoch went further. The man who only a year before extolled the
reforming influence of free information took the BBC News out of the Star TV
satellite package because it was causing too much friction with Beijing.

A couple of years later Beijing apparently considered that Murdoch was now
suitably submissive.

In 1996 News Corp. made a joint venture with Liu Changle, who had links to
the propaganda ministry. They created Phoenix, which broadcast to a limited
number of urban households politically trustworthy enough to watch foreign

Phoenix introduced Westernstyle fast-pace news reporting, but kept well
clear of sensitive topics.

The Chinese state-controlled media and censors learned a lot from Phoenix
and apparently decided that Murdoch could be managed.

He was given more access and over the next few years he sent teams to help
state operations such as China Central Television and People's Daily
newspaper develop their websites.

He also brought teams of Chinese television managers and technicians to his
satellite TV operations to learn how they worked.

These contacts ended up being a giveaway of News Corp. skills, and Murdoch
got nothing much in return.

But like so many other business people who have caught China market fever,
the Murdochs seemed to feel that one more demonstration of friendship and
loyalty would do the trick.

In a 1999 interview with the magazine Vanity Fair, Murdoch said of the Dalai
Lama, who Beijing believes is a Tibetan separatist, "I have heard cynics who
say he is a very political old monk shuffling around in Gucci shoes."

In 2001 in a speech in Los Angeles, James Murdoch claimed that Western
reporters based in China support destabilizing forces in the country and
that the health and spiritual well-being movement, Falun Gong, is "dangerous
and apocalyptic."

By this time, Rupert Murdoch, then 68, had made the most personal possible
demonstration of his love for China and married, in 1999, Deng Wen Di (now
known as Wendi Deng Murdoch), who was 31 years old.

Wendi Murdoch became her husband's lever into China and adviser on

They went on an investment binge in the early 2000s, spending hundreds of
millions of dollars, mostly on dot-com startups, and in some cases in
partnership with the son of then-president Jiang Zemin.

News Corp. even saw its television reach into China expand under this
patronage, which included joint ventures with the son of the head of the
propaganda ministry.

But the good times came to a sharp halt with end of the Jiang era and the
coming to power of Hu Jintao in 2005.

Despite having cozied up to Hu's power base, the Communist Youth League,
with joint ventures, the Murdochs were forced out of their local broadcast
television ventures by the new propaganda chief, with a loss of up to $60

Also in 2005, on the advice of Wendi Murdoch, the company bought for $580
million the Chinese social network operation MySpace.

Well, that didn't work out either, and earlier this month MySpace was
unloaded for $35 million.

C Copyright (c) The Vancouver Sun

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