May 17, 1996

The Party's Over For China's Paper Tiger

Eric Ellis, Beijing

THE Audi and Volkswagen motor service centres seem out of place in the sprawling compound that spreads the gospel of the Chinese Communist Party. But in China today, the centres are more than garages to get one's car fixed.

They have become essential to the survival of the Renmin Ribao, the fabled People's Daily, the mass circulation official organ of the ruling party.

In party decrees issued through the paper itself state that Chinese state enterprises must become self-funded as much as possible. That includes the People's Daily, a paper many Chinese have come to despise as the harbinger of unpopular policy. China's "socialist market economy" has meant a painful weaning off the cradle-to-grave state drip. At the People's Daily, that has also meant not as many Chinese read it any more, simply because they don't have to.

There is also more choice. Across the country, liberalisation has meant a blossoming of new papers and media, still under tight state control, but peddling soft news - entertainment, gossip and sport - ahead of political tracts heavy in irrelevant rhetoric.

The People's Daily's circulation is unlike that of any other paper. Most people don't buy it but can read it on bao lan, the bulletin boards that line many city streets.

The circulation heartland is the factories and offices of China's 50 million-odd party faithful, who are supposed to take it as a sign of loyalty. But less and less.

Joining the party today is not so much an ideological decision as a career move. The party is transforming itself into perhaps the world's largest chamber of commerce.

Serious new party members do their best to get hold of the tightly circulated Reference News, which airs controversial academic views and articles from the banned foreign press, faxed from China's embassies.

Since Deng Xiaoping opened China's door in 1978-79, the People's Daily has lost as much as two-thirds its circulation, from more than six million to "less than three million", as the paper's deputy director of foreign affairs, Mr Gao Fuyuan, explains. Independent studies put the paper's circulation at 2.1 million and still falling fast. While that may sound impressive, it circulates in a country of 1.2 billion people, actually making it one of the least read of major world newspapers.

Renovated regional papers like the Guangzhou Daily rake in four times as much revenue as the People's Daily on four times less circulation. The Guangzhou paper has even entered negotiations to buy a business newspaper in Hong Kong.

"We may have less readers now but we are seen to be a more authoritative source about the nation's progress," Mr Gao says.

With 700 journalists to employ, feed and house, 33 foreign bureaux to maintain in such places as the Ivory Coast, an Internet site to operate, not to mention an ideology, of sorts, to defend, running the People's Daily is an expensive business.

That has seen the paper branch out not just into auto workshops but into real estate in Shenzhen, hotels in Tianjin, a trading company in Shanghai and a taxi company in Beijing. It now also provides satellite transmission and printing facilities for 30 other papers and magazines. Newspaper advertising revenue that comes in annually at RMB100 million ($15 million) now makes less than half its budget.

There are also foreign joint ventures, which Mr Gao maintains fall well outside the paper's main ambit.

One such deal, with Rupert Murdoch's News Corp , is an information technology outfit called PDN Xinren. For Mr Murdoch it is seen as $7 million spent to develop party contacts to help with getting his loss-making Star Television paying across China.

The party's baggage proves difficult to dislodge at the People's Daily, where it was common for Mao Zedong and Deng Xiaoping to drop by and pen an editorial.

The Great Leap Forward, the Cultural Revolution, the Open Door policy and, more recently, warnings of the Tiananmen Square massacre, were all flagged first in the People's Daily.

Yet such is the contempt with which many Chinese hold the paper that in 1989 Tiananmen Square protesters composed a satirical song, sung to the tune of Frere Jacques: People's Daily, People's Daily, Truly Strange, Truly Strange, They are always printing lies, they are always printing lies, Oh, how strange, oh, how strange.

The People's Daily is also an important means for Sinologists to check who was in and out of power in Beijing's often arcane corridors of power. The airbrush sub-section of the photographic department has had plenty of practice over the years.

In January, the paper published a speech by President Jiang Zemin entitled "The Great Task of Journalists" urging media loyalty to the party.

Mr Gao says his paper abides by the edict, even in these trying economic times.

"We are trying to raise circulation by the means of the party's (recently enacted) Ninth Five Year plan," he says.

That should get the punters running out to buy the paper