Great (Middle Class) Expectations

Like YouTube in the West, privately owned video sharing Web sites such as, and make it easy Chinese citizens to create, post and share videos. In a country where all the media is state-controlled, the sites have become a phenomenon.

When Beijing newscaster, Hu Ziwei seized the microphone and accused her husband of infidelity at a ceremony kicking off CCTV’s 2008 Olympics coverage, the scene was recorded and posted to the Web, instantly becoming one of the most watched Chinese videos on the Web.

It’s just that type of embarrassment that the Chinese government hoped to squash when new regulations governing the video sharing sites went into effect last week the AP reported.

The rules, announced in December, appeared to be aimed at extending China’s Web censorship ahead of the Beijing Olympics and prevent unflattering videos from popping up. But industry analysts said regulators would be reluctant to enforce them strictly and risk damaging a promising industry.

The country is currently home to 210 million Web users. And sometime in 2008, China is expected to surpass the US as the most wired country in the world.

Online video revenues, mostly from advertising, are modest but nearly doubling each year, and investors are pouring money into sites. The government-sanctioned Internet Society of China forecasts total revenues of $22 million this year and $40 million in 2009.

If blogger and business consulant, Andrew Hupert is right, the government has more to worry about than the profits of the video sharing industry. China’s economic success is creating a new awareness of the world Hupert said.

As the growing Chinese does more business outside of China, it will expect more and more access to the information and content enjoyed by citizens of other countries.

When China was the Poor Man of Asia the government could justify a Stalinist information policy. But as Shanghai sharpies and the rest of China’s middle class get set to muscle their way in to foreign markets, lack of basic data is going to put them at a severe disadvantage. Chinese businessmen who have never seen a viral video on YouTube or read on editorial about western attitudes towards Tibet can still buy western brands and equipment – but they will have a considerably harder time selling their products or services overseas. Foreigners who come to China to do business have to accept culture gaps and blind-spots. Westerners shopping in their local malls don’t.


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