The news of the resignation of Baidu’s Chief Technical Officer Li Yinan came as a shock to Chinayouren, where I am still gaping at the CDT with goggling eyes.

This is going to make more noise now than it would normally, as people will be quick to find connections with the Google China affair and the hacker attack on Baidu. Both are unlikely to have any relation with Li’s decision. The crisis in Baidu was cooking long before any of those things happened, and Iranian cyber-attacks are pretty common these days.

But all that is normal. The shocking bit is that 6 days ago, long before any news had come out, one of the commenters on this blog told us something was going to happen to Baidu’s CTO. Am I in contact with higher beings? Of the internet or of the other kind? I don’t know, but I will try to pay more attention to mysterious comments in the future.

Regarding the Google affair, if anything, this crisis in Baidu makes Google’s move even more untimely, as they might have taken advantage of the situation now to catch up a bit on Baidu’s market share. In case there is still some doubt about my position re the Google affair, I am currently writing a post with title “Google: Don’t make that Mistake”. It will be on today if I don’t fall asleep before.

Wow. Baidu.com has been hacked this morning around 9:30 and is just back on at 3pm. More than 5:30 hours downtime.

Worst of all, they have no way to hide it was a hack, even the People’s Daily published the picture. Perhaps the party media does not consider websites as part of China’s glorious industry and it is not concerned with covering up. Not like they could have hidden it anyway, but I find it interesting that they didn’t try:

This reminds me of yesterday’s article on Caixin, coincidentally titled: Page Not Found. It explains the very unusual situation of a Chinese internet  industry that is averse to innovation.

But in addition to the domestic environment’s impact, rottenness inside the industry deserves some blame for the crisis. Whirlwind development led to stories of overnight riches, which in turn attracted a significant number of unqualified entrepreneurs with questionable motives. The industry now looks at innovation as risky, while copycats seek instant success with online games, cheap content and plagiarism. They exploit regulatory loopholes or do business in the economy’s gray zone.

I don’t want to read too much into a simple incident, but it is kind of a big deal in the first Chinese Nasdaq company, a website ranked N1 in China and N8 in the World. I can’t help feeling that Baidu have been too long sitting on their cozy market share and government protection, selling search results or luring in users with copyrighted mp3 for download. Instead of innovating and improving their security.

To be sure, Baidu also brings out some new stuff once in a while, and I quite like the Baidupedia to look up Chinese things. But when you compare with Facebook, Twitter or Google, you see those companies are constantly taking risks to try out new ideas, while Chinese sites tend to sit around and copy. I mean, surely you can’t run an internet company like you are running a steel mill?

Just a coincidence, probably, but the COO of Baidu stepped down yesterday “for personal reasons”.

H/T Danwei and CDT.

UPDATE: It is 7pm and baidu.com is still on and off. The rest of the services, baike, mp3, etc. all work properly and can be accessed through baidu.cn, but the main page is down at this moment.  Downtime close to 10 hours already.

The Tiger is coming to the surface. The New decade has already come in the West, and in China we are again in this no man’s land between the Solar and the Lunar New Year, between the Bull and the Tiger. It is time to look back and see where we stand.

In World politics time is measured in decades, and many will call the 00s the decade of China. It is just a simplification, these 10 years are nothing but part of a longer process started in 78, and probably still ongoing for another decade more. And yet, if we have to choose one event that marked the decade in World politics, like the end of the Cold War marked the 90s, the rise of China is the most reasonable choice. No other event is likely to be be more decisive in the history of the World.

In the first post of this Year End edition we proved that, within the general growing trend of the decade, 2008 was a peak for China’s presence in the World media, and 2009 has gone back to relatively normal levels. This peak cannot hide the general trend: that China is growing inexorably to become a World superpower and that it is already changing the power balance of humanity.

Measuring the Chinese decade

If we have to chose one single parameter to measure this rise, it is the economy that can give us the best clue. There is no point in going to the decimals when analyzing decade trends, so the calculation is simple: China has grown roughly 7% faster than Western countries in the last decade, and all seems to indicate that this will continue into the 10s.

The calculation* is straightforward:  1.07^10 = 2

At a rate of 7% differential a year, the size of China’s economy relative to the Western economies is doubling every decade. Today most estimates of GDP place China between 1/4 and 1/2 of the USA economy, depending if it is measured in nominal GDP or in PPP. This means that, if nothing else changes in the next decade, Chinese economy will be the biggest in the World anytime between 2020 and 2030.

The consequences of this calculation are enormous, and they are already operating today. That is because in politics we behave like in the stock market: decisions are made taking into account the foreseeable future rather than the present. China is already displacing the EU in World politics, even if it is a fraction of the European economy, even if it doesn’t want to be the protagonist. The media and the politicians are betting on the future value of China.

The Question of the Decade

Of course, nothing guarantees that the growth patterns of the 00s will continue in the 10s. There is one important school of thought that insists on the unsustainability of the Chinese system. They mention corruption, growing inequality, lack of civil rights and a civil society, repression of creativity and free market, the inability to build World class brands and a financial system in disarray, among other problems, to justify their prediction that sooner or later the Chinese economy is bound to crumble.

Those of us who live and work in China know that these problems are serious and very real, and that somewhere down the line there is bound to be a serious readjustment. And yet, the same predictions have been made regularly almost every year in the last three decades, and the collapse has not materialized.

The real question of this decade is When?

Will the Chinese economy stop growing before or after it has become a superpower as large as the USA? Will the Chinese seriously demand more rights and liberties before or after China has become a developed country? Will the economic and political readjustments be done progressively with the new generation of Chinese leaders, or will there be a dangerous explosion in this decade?

We don’t have the answers to this today, and you should not believe any China expert who claims to have them. All we can do is frame the question above, and watch out for early signs to answer it in the coming years.

There is however one statement we can make today. Looking at the World, it is obvious that many important players are already betting on the rise of China, and this view is gathering more support every year. As we have seen above, to the extent that the majority in the World believes in the superpower scenario, China is ALREADY a superpower. The political power comes years in advance of the GDP, and the new World order is already a fact today.

Photo: Eric Risberg

*This is an engineer’s calculation, the nightmare of any serious mathematician. And yet, most bridges we do are still standing, and when we speak of decade trends anything more accurate than this is a joke.

Goodbye 2009. Here is another Year-End Special of Chinayouren, the first after a full year of operation. Thanks all for sticking around.

As usual we will start with the popularity of China in the news. This year it is more interesting than ever, because 2010 is a round number, and the early-birds of the China Experts are already chanting the Chinese decade.

As we predicted last time, 2008 was a peak for China related news in the World, and it was going to be difficult to beat that in the short term. Within the general rising trend, 2009 has gone back to reasonable levels of media attention, partly because Xinjiang and the Tiananmen anniversary were no match for Tibet, Sichuan and the Olympics; partly because the US Obamania has stolen the show from the Middle kingdom.

In the first months of the year the crisis did bring some attention to China, but as soon as it became clear that the stimulus package was working and damage was under control, the journalists’ interest waned. Here are the results of my Chinanews-meter, the high precision tracking device I purchased from the Uni of East Anglia:

Occurrences of "China" in LaVanguardia 1881-2009

This year I want to go a bit further, so I add below the statistics from Google Trends for the News references of the term “China”. Note that Google Trends is not more precise than my own original method, because the number of news sources that Google references always grows. To recalibrate the scale we must try neutral words like “when” or “he” and take them as visual zero axis, leaning the whole curve to the right. The result confirms clearly the peak of 08.

Google Trend News for "China" (axis not corrected)

Still, this system is not very accurate, and I would like to find a more reliable way to estimate the impact of China.  I guess the old Chinanews-meter above is as good as I can get for now. As a random mainstream newspaper in Barcelona without any special connection with China, there is no reason why La Vanguardia  shouldn’t replicate roughly the general trend in the West.

Another possible solution (albeit without numbers) is to use the tool “Google Timeline” to compare some occurrences of “China” within particular newspapers. Interestingly, I have seen that the “highbrow” newspapers, such as the NYT or WAPO, tend to have a more stable coverage of China, as they usually have staff dedicated fulltime to this subject:

New York Times occurrences of "China"

Whereas more “lowbrow” papers like USAToday tend to show more the peaks and the valleys, as they follow more closely the trends of popular interest (see the massive peak in 2008 Tibet+Sichuan+Olympics):

USAToday occurrences of "China"

As a temporary conclusion I would say the results from USAToday and similar papers are more significant, because by far that kind of media have the largest number of readers in the World. This confirms again the trend seen in my old Chinanews-meter, and it also confirms the impression of most China bloggers I have spoken to: 2009 was not as hot as 2008.

Your call

I am still not entirely satisfied with these measurements and I am looking to find a better way to estimate “China” and follow it over time. If you have any idea please let me know in comments. Any suggestion welcome.

In the meantime, the bets are open for 2010 predictions, closest guess gets a beer.  Remember there is the Shanghai Expo and the end of the stimulus package, plus the novelty of Obama will be worn out. I go for a safe 4,000 this time (we have to use the Chinanews-meter again as it is the only chart with numbers in it).

In the next part we will see the results of this blog in 09, and I will inflict you with the best of the 2009 collection. While I get that ready, to follow the year end tradition, here’s the green pastures of the Biscay coast:

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UPDATE: This morning I did a “callibrated” Google trend, taking the word “when” as horizontal reference. “The lower curve is the one representing “China”. The results are far from precise, but they do confirm a strong peak in 08 and return to normal in 09:

Occurrences of "when" (up) and "China"(down) in Google Trends News

UPDATE2: I have found out these days one reason why the Chinanews-meter shows such a sharp fall in 2009: in the beginning of the year the popular correspondent of La Vanguardia, Rafael Poch, was demobilised from Beijing. It is very possible that a few hundred of the articles missing in 09  can be explained by his absence.  Of the charts above, probably the general reality of Western media is somewhere between the USAToday and the NYT charts. I am still looking for a way to put numbers to that, any idea would be welcome.