Say you are a Shanghai-based economist and doubt the veracity of China’s latest trade data. You put out a research report to that effect, one that creates buzz on the Internet and exposes you to something far worse than making a bad call: prison.

Or say you are a photographer in Chongqing and circulate images of a politician who loves Rolexes. Bloggers begin buzzing about how a modestly compensated public official could afford a stable of $7,000 watches. You, too, may end up in handcuffs.

What if overworked and underpaid Foxconn Technology Group workers churning out iPhones they can’t afford choose to vent online? How about an environmentally minded graduate student who questions the accuracy of Beijing’s air-pollution readings? Or a mother who lost a child in the 2008 Sichuan earthquake who complains in a blog post that repairs still look shoddy? Could all of these people get arrested?

Yes, according to a new threat from Xi Jinping’s government: three-year jail terms for Web comments deemed defamatory. This isn’t happening in a place of George Orwell’s imagination, but in a country many still think is destined for world domination. China’s escalating war on free expression is unfolding in ways even the author of the classic 1949 novel “Nineteen Eighty-Four” couldn’t have dreamed up. It’s clear evidence that hopes Xi’s government would be serious about economic reforms are also fiction.

Few expected Xi to be China’s Mikhail Gorbachev, but the president’s crackdown is particularly poorly timed. Markets are looking for Beijing to roll out a raft of reforms in November and were hoping for them to be bold ― a big bang that would set the Chinese economy on a more sustainable growth path. Instead, the latest Internet rules signal timidity rather than strength: The government has clearly been taken aback by the explosion in online commentary on microblogging services such as Sina Weibo and is desperately trying to reassert its control however it can.

A similar fear has resulted in a rollback of the campaign to clamp down on runaway credit growth ― a refreshing sign of discipline that economists had cheered this summer. Li Keqiang, China’s reform-minded premier, can only go as far as Xi permits him, and the leash appears rather short. Despite Li’s pledge to rein in excesses, the broadest measure of new credit nearly doubled in August.

The longer Xi and Li keep the loan spigot open, the longer state-owned enterprises will dominate. Their primacy is the biggest barrier both to China switching focus away from sweatshops toward services and to ending corruption. Similarly, policing the shadow-banking industry is key to avoiding a Japan-like debt crisis. Yet too many Communist Party power brokers are making tens of millions of dollars off state-dominated China Inc. Beijing lacks the political will to irk these cronies, let alone inflict pain on a restive population.

Nothing would end this corrosive dynamic faster than a freer media and Internet. In May, a vice chairman of China’s economic planning agency lost his job after allegations of improper business dealings made the rounds among bloggers. This month, another official, Yang Dacai, got 14 years in jail after online photos of his pricey watches inspired a crowdsourcing investigation. That won’t be possible now that local cadres can aim politically motivated lawsuits at anyone with a camera and an IP address.

China also needs a freer Internet to empower would-be entrepreneurs, the ones who will create the globally relevant indigenous brands China still lacks. How can young Chinese compete with Silicon Valley if they don’t have access to leading social-media networks, miss the big debates of the day and are terrified of expressing themselves?

Rules about defamation can be a good thing, especially as the uncharted wilderness of the Internet offers limitless avenues for rumor-mongering, cyberbullying and fraud (and Chinese cyberspace in particular can be a pretty brutal place). So long as they are applied equally and transparently and handled by independent and robust judicial systems, such regulations help maintain basic civility and fairness.

That hardly describes the situation in China, though. By Beijing’s definition, “defamation” could mean anything that any politically connected person doesn’t want to see made public. Nor is China making it clear who it wants to protect or where the boundaries lie. How much criticism, for example, is too much, and who decides? By all appearances, punishment could even be imposed retroactively.

It’s telling that China’s standard rests on how many people read a viewpoint. If your Web comment gets more than 5,000 hits or is reposted more than 500 times, expect a knock at the door. In a nation of 591 million Internet users, that’s a very low threshold for a jail term. This quota rule suggests Chinese authorities care less about whether a blogger is telling the truth than whether he or she has the power to provoke a broader discussion of touchy issues such as corruption.

So let’s call this what it really is: a big Orwellian stick being waved around to intimidate China’s netizens in language they will have no trouble understanding. But it’s also a reminder that China’s leaders lack an ingredient vital to overhauling the economy: self-confidence. Just don’t say that online, lest you end up in shackles.

By William Pesek
 
William Pesek is a Bloomberg View columnist. ― Ed.

(Bloomberg)