Financial Times sale: Japan’s Nikkei, China’s envy
For more than a decade now, Beijing's Mandarins have dreamt of such an acquisition the Japanese have tasted success with.
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"China's Political Influence Limited Despite $ 46 Billion Investment in US", ran a headline in the website of the Communist Party's official People's Daily yesterday. The article lamented that despite the billions of dollars from the world's second-largest economy, China had "little political influence" in the United States. "To have more influence," suggested Diao Daming, an academic at Beijing's Chinese Academy of Social Sciences, "Chinese enterprises need to invest more in those areas that are closely related to the daily life of American people".
Just this week, in a development that stunned the media world, Britain's venerable newspaper the Financial Times was sold to the respected Japanese media group Nikkei for $1.3 billion. The acquisition of the FT is, no doubt, a landmark event: it would have been unthinkable a few years ago for an Asian media company to acquire one of the Western world's most influential newspapers, underlining both the troubles facing newspapers in the West today and the hunger of Asian companies for global reach.
For more than a decade now, Beijing's Mandarins have dreamt of such an acquisition. Spreading China's "soft power" overseas has become a priority this past decade for Beijing, which has spent billions of dollars in acquiring lavish offices for its state media outlets Xinhua and China Central Television (CCTV) in New York, setting up CCTV America and establishing hundreds of Confucius Institutes in foreign universities.
Yet Beijing's officials have lamented that even as China's dollars are buying up everything from luxury hotels in New York to stakes in London's biggest water companies, Chinese investors have been unable to command political influence, as the People's Daily article suggested this week. While there have been no suggestions that a Chinese entity bid for the FT, recent notable attempts to acquire struggling magazine Newsweek as well as an eccentric billionaire's public attempts to buy a stake in the New York Times fizzled out right at the start. The billionaire, Chen Guangbiao, couldn't even get an appointment at the NYT, according to reports at the time.
Part of the problem, of course, is the Chinese government's control and influence of media companies, which will certainly spook any foreign company. While there are reasonable expectations that Nikkei - itself a more than 100-year-old reputed media company, and one that is private - will allow the FT to maintain its independence, it is hard to imagine a Chinese media enterprise functioning the same way, given the Communist Party's penchant for exercising strict control over what the media in China can and cannot report.
This is not lost on Beijing's planners, who see China's soft power efforts as being stymied by the heavy hand of the government in promoting such initiatives. "The habitual reliance on government planning and financing, and the one-side pursuit of larger scales, instant [impact] and sensational effects, all with a surfeit of public money and a thick government tint - even leads to greater suspicion and resentment," remarked Zhou Hong, the director of the Cultural Division of the Overseas Chinese Affairs Office of the State Council or Cabinet, which plays a key role in such efforts, in an article in the People's Daily earlier this year, which was translated by the China Media Project.
There were, hence, many sighs in Beijing on Friday when news broke of the FT going to a company not just anywhere but in Japan - an Asian rival and China's historical adversary. One official told by a Chinese journalist reacted "with shock and disappointment, uttering 'no way, no way'". A friend of mine who works for a state media organisation in Beijing had a similar reaction. "Just unbelievable," he said, shaking his head.