8 Mar 2018

The costs of internet censorship by the Chinese government

Yangze writes:*

The internet has become an indispensable mainstream media in our daily life. There is no denying that the internet is conceived as a powerful device for commercial capital and social welfare accumulation. However, the internet has its unique economic traits as a quasi-public service with natural monopoly characteristics and  invaluable positive externalities. These benefits encourage states to invest in telecommunications and regulate operations and prices to increase accessibility to consumers. On the other hand, the internet is also associated with cybercrimes, pornography, invasion of privacy, etc.

These concerns have led to regulations and censorship aimed at benefiting society. However, the degree and type of censorship varies with political systems. The picture below shows Internet censorship from an NGO perspective (Warf, 2011) and identifies China as a strong censor.

China entered the internet era in the late 1970s but held the largest share of "netizens" in 2008. The unique feature of Chinese internet censorship regime is the government's ownership and control of internet infrastructure, operators and use. At the same time, these monopolistic behaviors and heavy interventions have been legitimated by a series of provisions and regulations. Inconsistent and extensive enforcement of the regime has attracted global criticism of the government's motives, respect for human rights and obligations under trade agreements.

There are many articles on the reactions of Chinese netizens to the government's one-sided cat-and-mouse game, but most individuals avoid accessing international information or communicating sensitive topics. Only a minority tries to circumvent surveillance. Unfortunately, the Chinese Communist Party instituted a ban on personal VPNs (Virtual Private Networks) provision recently, which further exhibited the party’s “networked authoritarianism”.

It is said that the cost of the censorship regime had already reached $770 million by 2002, so the cost of  restricting public use of the internet must be much higher with today's information flows. (China went from 22 million internet users in 2000 to 770 million in 2017.) These costs on commercial and social internet users obviously conflict with the goals of widespread Internet use.

Thus, it will be interesting to understand more about the costs of censorship and whether policy changes might move Chinese cyberspace closer to sustainability.

Bottom line: The Chinese internet censorship regime has its own features, the buildup of which is closely aligned with the larger regime of economic growth and political control. What are the costs and benefits to different groups of the government’s suppression?

* Please help my environmental economics students by commenting on unclear analysis, other perspectives, data sources, etc. (Or you can just say something nice :)