Today I'm going to tell you a story not of how the internet is changing China - but also how China is also starting to change the internet.


My story begins in an unlikely place: the village of Pu Sa Lu.

A couple hours outside of Beijing up winding mountain roads, I found myself there in the winter of 1999 with my CNN camera crew. We had gone there, believe it or not - to do a story about a rash of alleged UFO sightings that were happening in various parts of China at that time. Including in this village of about 150 people.



Now, China may seem pretty alien to many Americans but one thing Americans and Chinese share are large populations of people who believe strongly in the existence of aliens. The advent of the internet in China spawned a whole new generation of Chinese UFO fanatics - with all the UFO news forums, discussion forums, and so on. And when the buzz about sightings gets big enough, sometimes even the Chinese mainstream media picks up the story.


And so my camera crew and I were welcomed by the village's Communist Party Secretary who immediately took us to see the farmers who claimed to have seen mysterious flying objects over the chicken coop and pigsty. But it soon became clear that UFO sightings were not his main agenda. He was more interested in showing us the mountain village's tourism potential, with a local temple they were restoring.


Then he took us to Pusalu tourism promotion central, otherwise known as the village communist party office - a cold little one-room office with a phone line which his teenage son was using to dial up on the internet and create the village's website..Pusalu dot com.



This is Pusalu dot com today in 2005. It has gone from an amateur student-designed with updates on UFO sightings and information for Chinese city tourists wanting to experience the simple country life. to an elaborate tourism promotion site with flash animation. And it appears the village's ability to promote itself on the internet has changed the fortunes of the place, bringing in investment to build the necessary tourist traps..



They've also gone from having one PC in the party secretary's office to hosting a computer-training center for residents of the surrounding district.


Now THAT is precisely why the Chinese government is now spending 100 million dollars to upgrade the nation's internet infrastructure. There is a huge problem of unemployment and under-employment in the Chinese countryside. But the cities are already overwhelmed with farmers migrating to urban areas in search of work. The hope is that more villages like Pusalu will use the internet to find markets and customers - to migrate digitally, rather than physically.



But the internet is advancing the fortunes of many other people who those Communist Party Cadres aren't so interested in promoting - like China's first Sex-blogger Muzi Mei..

It used to be that you couldn't be a famous cultural icon in China unless some cultural officials had signed off on the lyrics for your album, the kinds of characters you played in films, or and the kind of public image that you portrayed.



Now you can get famous if you publicize the titillating details of your sex life on your blog. On Monday Muzi Mei wrote: "With or without a boyfriend, a woman should make love at least once a week." Then proceeds to go into details of how.



Then there's 26-year old Yang Chengang and his hit MP3 song: "I love you like mice love rice" Yang was just an average music teacher and karaoke fanatic in some place nobody's heard of in Hubei province until his friends convinced him to upload this song he wrote onto the internet. He became an overnight smash hit and now has a concert tour and a record deal.



The ability to select one's own cultural icons makes many Chinese feel empowered. This is Li Yichun, winner of the the "Super Girl" singing contest - a kind of Chinese American Idol, in popular vote of Chinese all around the country using their mobile phones.


As the Chinese blogger Michael Anti quoted one of his friends: ""I don't think that I will ever get to vote a president in this lifetime, so I'll choose a girl that I like." He then went on to comment: Super Girls is obviously not the same as democracy, but it is a fantasy for the 1.3 billion Chinese people who do not have democracy."


[SLIDE 10]

But this technological empowerment has yet to penetrate to most of the population, more people are likely to have their first internet experiences through cell phones, not PC's.


* 103 million: World's 2nd largest internet user base (U.S. about 135 million)

* Only 7.9% Chinese are online

(compared to 67% of Americans)

* 10% global PC demand, 15% global handset demand are in China.

* 385 million mobile phone users (World's #1 in mobile subscribers.)


[SLIDE 11]

And Chinese user-created content services are growing fast.

* over one fifth Chinese internet users use BBS (internet bulletin boards)

* more than 50 blog-hosting services

* 5 million blogs

* over 200 billion SMS mobile phone short text messages sent in 2005


[SLIDE 12]

The exponential growth of Chinese blogs is now a major driving force in the growth of the international blogosphere, according to David Sifry, founder of the blog-tracking service Technorati in a recent presentation on the size of the global blogosphere.


This is happening even though the Chinese government launched a new requirement this summer that all independent websites and blogs have to register with the government. And despite the world's most sophisticated system of internet censorship.


[SLIDE 13]

What you need to understand about Chinese internet censorship is that it's not aimed at total social control. That's obviously impossible and futile. Chinese internet censorship targets a very focused objective: preventing new political leaders and movements rising from the internet just the internet is spawning China's new cultural icons and trends.


In China there is no freedom to say things online that could lead to demands for political change. This summer, villagers in the Southern Chinese village called Taishi tried to organize a recall election for the village chief, who was widely believed to be corrupt. Stories of conflict between the villagers and local officials spread around the Chinese internet - mainly on internet bulletin boards and blogs, but even spilling into a few mainstream media stories. But then the government decided the whole thing was getting out of hand. The place was declared off-limits to journalists, the media was forbidden from reporting anything further on the story, and all internet forums discussing Taishi were shut down and censored.


[SLIDE 14]

Anybody here not know what this is?


[SLIDE 15]

Well this is what the Great Firewall of China looks like. When you try to get on websites like Human Rights Watch, you get an error message.


[SLIDE 16]

This is a Google News search for the Chinese phrase "Tiananmen Massacre" done from Cambridge Massachussetts.


[SLIDE 17]

This is the same search done on a Chinese internet connection hosted inside China. "Pages containing the phrase �Tiananmen massacre' cannot be found."


While it's Google's decision not to show all the blocked results - they say it makes a better user experience - the blocking itself is done at the router level, by the Chinese internet service providers and system administrators. Chinese telecommunications authorities can configure routers to block hundreds of thousands of web addresses and keywords.


This capacity for censorship is built into basically all internet routers. Technology for packet filtering and IP blacklists - built into routers by Cisco and all other router manufacturers - helps internet service providers and system administrators protect us from viruses, worms, and spam. It enables libraries and parents to block children from seeing pornography. The same technology can also be taught to treat the word "democracy" like a virus.


[SLIDE 18]

But as the Chinese are proving, treating a whole genre of speech like a virus doesn't kill the growth of the internet in China - or its commercial potential, even when it comes to user-created content and citizens' media like blogs.


This is one of China's biggest blog hosting services called Blogbus. Its Managing Director, Isaac Mao who I know quite well won't even host his own blogs on his own service because in order to be commercially viable they are baking censorship into their blogging software.


Commercial web services - domestic search engines, internet bulletin boards, mobile phone messaging services, web-hosting services and blog-hosting services are all expected to police and censor their users' content, and maintain long and frequently-updated lists of unacceptable keywords that cannot be posted or sent.


They are baking the censorship into their software.


[SLIDE 19]

So a couple million Chinese blogs like this one exist on services that automatically censor their posts.


[SLIDE 20]

Even blogs like this one- one of China's most popular blogs, whose author even broke the story of a murder last year. He even posted an essay this week about how blogs enable free speech.


Yet at the same time, this blogger can blog safely because the software will save him from any possible dangerous political impulses. If he tries to publish something on the Tiananmen Square Massacre, his post will be rejected by the keyword filters.


So here we're seeing a new and very effective model of soft censorship developing - the parameters are set wide enough, that the internet still enables so much more communication and information exchange than was ever imaginable before, that most Chinese internet users rightly feel they're reveling in new-found freedom. Yet at the same time, China has put more cyber-dissidents in jail for political speech online than any other country in the world.


[SLIDE 21]

American companies operating in China are helping to build this new model of speech control by baking censorship into their software too. When Microsoft launched its MSN Spaces Chinese language blogging service, I tried to create a blog titled "I Love Freedom Of Speech, Human Rights and Democracy".


[SLIDE 22]

I got an error message. "You must enter a title for your space. The title must not contain prohibited language, such as profanity. Please type a different title."


The Chinese government didn't do this. Microsoft did.


[SLIDE 23]

Yahoo! Has already come under a lot of criticism for baking censorship directly into its search engines. It is also choosing to house services like e-mail within Chinese legal jurisdiction. So when the Chinese police needed the IP address of an anonymous e-mail account sending sensitive political information to a U.S.-based dissident website so they could trace and arrest whoever sent the email. Yahoo! Handed over the user information for Shi Tao - who is now serving a 10 year jail sentence for sending that email.


[SLIDE 24]

But while people can't rant and curse online about their own government the way we get to do on our blogs here, they can rant and blow off steam to their hearts content when it comes to other countries' governments. This is the "Anti-Japan Forum" where one of the posters is discussing the sale of anti-Japanese products.


[SLIDE 25]

Products like this video game, Resist Japan Online, where the goal is to kill as many Japanese people as possible. Online hostility against the Japanese is practically encouraged given that Japan occupied China and killed too many Chinese over half a century ago - and especially given that some of Japan's textbooks and politicians today remain unrepentant.


[SLIDE 26]

But when that hostility spilled into the streets this Spring in reaction to a row between China and Japan over those unrepentant textbooks, the government got nervous. Because these student-led anti-Japanese protests were organized through cellphone text messaging, internet bulletin boards and blogs.


And that is one of several reasons why the government has moved this year to impose a new round of regulations and controls over online news and information.


[SLIDE 27]

Interesting though, the information crackdown doesn't seem to be worrying the businesspeople that much. The blog hosting services continue to grow like gangbusters - though they're policing themselves more tightly.


[SLIDE 28]


While new user driven content services - like this mobile blogging platform - continue to evolve.


Now one thing you HAVE to understand is that the Chinese aren't simply playing catchup to duplicate what we have here. They're developing their own uniquely Chinese internet.

And it's an internet that will be accessed increasingly through mobile phones, not PC's.


I recently met the CEO of this company, Marcus Xiang. He says most Chinese outside of the big cities have a TV and a mobile phone. They're unlikely ever to have a PC in the home. So they watch shows incoming, but then communicate, create and consume even more through mobile phones which are increasingly web enabled.


[SLIDE 29]

Look at this blog on his service. Not only is a of the content posted from a mobile phone, but it's all configured so that you can read it and other people's blogs - and rss feeds of content, all on your mobile phone. So a PC never has to be involved.


And just like the other blog-hosting companies, he's baking his software to keep his company out of trouble, which means certain kinds of political conversations and organizing will simply be prevented from happening at PDX.CN


So here's the thing. There's a political assumption here in this country that the internet will ultimately play a key role in transforming China into a democracy. I wouldn't be so sure about that.


Because China is also changing the internet, and pioneering a new model of censorship that actually feels very free to most users - except the potential political activists, who in any society are a minority. It's a model that China is already starting to be copied not only by neighboring dictatorships like Vientam and others like Iran. It's a model that could also come in handy to other governments that tend to call themselves democratic.


[SLIDE 30]


Because I come from the Berkman Center I'm required to be a Larry Lessig groupie. And so I'll end with his point.


Code is Law.


But with a new question: If the Chinese are writing the code that builds the next generation of the internet, will soft censorship be baked in?


Is this future inevitable? Are we helping to build it? What other alternatives might we have?