From China Daily 11/6

Questionable move

The Foreign Ministry has denied the allegation in the overseas media that the "Green Dam" web-content filter to be installed in all computers is part of a government effort to censor the Internet.

The Ministry of Industry and Information Technology (MIIT) clarified that users can choose to install or uninstall it as they please, and that the government will not monitor user activities or collect user data.

In spite of the claim of parental endorsement, said to be strong and broad, the mandate to install the "Green Dam" web-content filter in all computers to be sold in China is turning out to be more controversial and unwelcome than decision-makers would like to believe.

The Green Dam is designed to "directly and actively identify and block pornographic images, erotic texts, and undesirable websites, and to facilitate parental control of their children's online activities," according to MIIT sources.

In an announcement on May 29, the MIIT described the move as an extension of the campaign against "vulgarity" in the cyberspace.

Unhealthy content widely available on the Internet, pornography and violence in particular, is harmful to the young and the under-aged. This is true not only in China, and the Chinese authorities are not the first or only ones to intervene. Which is why the MIIT feels wronged.

Proper parental oversight and guidance are believed to be necessary and justifiable. There was little dispute when the authorities installed, on a trial basis, filtering software on school computers.

The MIIT is spending more than 40 million yuan in installing the Green Dam on every computer unit sold. This is a negligible sum, some say, compared to mammoth government spending programs. But if the financing is need-based, a considerable part of even this amount can be saved.

There is a need for filtering software, but not everyone needs it. So installing it on every unit sold is wasteful expenditure in the first place. The government may cover the entire cost, but it is the taxpayers' money. And, the policy affects everyone who buys a computer on and after July 1. In this situation, was any thought given to due procedure? We share some critics' view that a public hearing should have been held prior to such a significant decision.

Since the MIIT has bought the right for use of the software for one year, and it is a free download, there seems to be no need to impose it on each computer sold. With the amount of money spent, the government can sponsor a public interest website, which offers filtering devices to users who want it. Making it obligatory, on the other hand, is something different, and makes us wonder if the decision-makers have seriously considered the complex legal implications. If they have not, a number of questions have now been thrown up for deliberation.

Who is supposed to decide what is pornographic, violent, or undesirable and deserves to be blocked? What are the criteria? Who draws the line and on what basis? Are software developers qualified to do that? How is citizens' freedom of expression or right to know to be balanced against the need to filter "unhealthy" content? Is there any basis in law for the MIIT to issue such an order at all? These are not questions that can be brushed away.

 

Be calm and cautious

A continuous fall in both consumer and producer prices does not necessarily mean that deflation will take root in China because global commodity prices are climbing from last year's lows. Yet, it can serve as a check on optimism that takes recovery of the Chinese economy for granted.

China's consumer price index (CPI), the main gauge of inflation, fell 1.4 percent year on year in May. This is the fourth consecutive monthly decline since the index dropped 1.6 percent in February, the first fall since October 2002.

Meanwhile, China's producer price index (PPI) - an important measure of inflation at the wholesale level - fell 7.2 percent year on year in May, compared with a 6.6 percent drop in April and a 4.6 percent fall in the first quarter from the same period last year.

For those who are worried about deflation getting entrenched and choking off demand, the latest price figures may appear to justify their concerns.

But, they should ignore neither the high price base that contributes significantly to the current year-on-year fall of prices nor the latest change in the trend of pricing.

For instance, the current steep fall of producer prices - an indication of future change in consumer inflation - is largely driven by a deep cut in oil prices and double-digit declines in the cost of iron ore and other raw materials. Though still way below the record highs (above $147 in mid-July 2008), international oil prices have almost doubled since last December. Other commodity prices are also rising rapidly.

In the circumstances, it is not unexpected that many observers foresee a return to inflation later this year. Given the government's strong stimulus package and the unprecedented credit support by Chinese banks, it is more likely that China may need to prepare for inflation returning before economic growth.

Since moderate inflation can help combat recession, a return to inflation might be welcome. After all, the country has targeted headline inflation of 4 per cent this year. However, while many other economic indices point to improving fundamentals, it is too early to take recovery for granted, especially when large deflationary pressures remain.

There are many optimistic notes being struck nowadays, such as the worst of recession being over in many major economies; and the Chinese economy rebounding strongly on an explosion of credit this year.

But falling prices indicate that the real economy is not performing as well as it appears. There is case for caution until prices return to positive territory and the economy regains momentum.