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Why Crowdfunding Won't Change China Anytime Soon

BY Jessica McKenzie | Tuesday, April 8 2014

Promotional image for My 17 Gay Friends, a short film crowdfunded in China

Three years after the launch of China's first crowdfunding website in July 2011, the idea is “gradually catching on,” as the Wall Street Journal reported in January. The World Bank estimates the market potential in China by 2025 to be US$46 - $50 billion dollars. Modern China scholar Julian Gewirtz
argues in a Tea Leaf Nation post that the crowdfunding trend might even usher in political change in China. However, as crowdfunding is subject to the same constraints as other forms of online media, that is an extremely optimistic assertion.

Gewirtz writes:

Crowdfunding could also gradually tilt the Chinese Zeitgeist in the direction of greater democratic expectations. In a country where most people have never participated in a free election, crowdfunding echoes the democratic process: It allows a large group of individuals to express preferences, then view data aggregating all individual responses, which ultimately determines whether a proposed project comes to fruition.

Currently, Chinese political elections, when they happen, are confined to selecting local government leaders. Voting also occurs online, but mostly to select among pre-screened choices like talent contestants on popular television show Voice of China or “grassroots heroes” nominated by state media. But crowdfunding is different. It allows anyone to create a project that can be voted up or down; no one authority vets the slate.

Actually, Zhang You, the co-founder of China's pioneer crowdsourcing website Demohour, told the People's Daily that they only display 10 percent of the projects submitted on the Demohour website. This is ostensibly to prevent scam artists from posting fraudulent projects, but it also opens the door for self-censorship.

TechPresident reached out to Charlie Smith, the co-founder of, for his opinion on crowdfunding in China.

Smith writes:

In reality what will happen with crowdfunding websites is that they are (or will be) burdened with the job of self-censorship of their own platforms. They will be given lists, like the lists that are given to media outlets, about projects that should not appear on their websites. They will be tasked, at their own expense, to remove this information when it appears and to share information about the people behind the project. In the worst case scenario, they may even let the project appear for a short time while they put together a list of people who support the project.

Gewirtz acknowledges that the authorities have the power of veto (“Of course, the party will act swiftly against crowdfunding proposals that challenge Communist authority directly”) but the net effect of self-censorship is the same as if “one authority” was overseeing crowdfunding platforms.

Gewirtz also cites two examples of areas ripe for crowdfunding, including in the case of “another earthquake” in southern China for which “entrepreneurial citizens could use crowdfunding platforms to organize relief efforts independent of the government.”

Smith points out that the 2008 Sichuan Earthquake galvanized grassroots organization in China, and also that an activist spent five years in jail after investigating the collapse of poorly constructed schools that killed more than 5,000 students.

This begs two questions: what could crowdfunding have added to the grassroots organization effort, and why would the authorities let something (like the investigation into the schools' collapse) slide on a crowdfunding site that they wouldn't permit otherwise?

This is not to say that the desire for change is not there. Take, for example, Gewirtz's example of the journalist crowdfunding investigative stories that depart from the state-run media formula. Sounds great, in theory, but...

[Yin Yusheng] risks becoming a target in the government's intensified crackdown on online expression. In recent months, China's leaders have clamped down on what they call online rumors and efforts to erode the rule of the Communist Party through lies and negative news. Their targets have included celebrity bloggers that call attention to social injustices.

Even if the government does not detain Yin, it could scrub his reports from the Internet.

...censorship rears its ugly head again.

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