The New Economy, Southern Weekly's Excitement, and the WTO That Followed | 1999 Memoirs ④

"[The new economy's] biggest driver was the WTO, and the second was the internet."

China's business landscape today was shaped, for the most part, by companies founded 20 years ago. No one saw that coming.

Sohu, founded in August 1996.

NetEase, founded in June 1997.

Tencent, founded on November 11, 1998.

Sina, founded on November 30, 1998.

Alibaba, founded in April 1999.

Trip.com Group, founded in May 1999.

Dangdang, founded in November 1999.

Shanda, founded in November 1999

……

On this incomplete map of internet startups in 1999, we can already pick out the companies that still matter today:

NetEase had the most-visited site of the moment, its email and personal-homepage businesses booming. William Ding, 28, hurried from Guangzhou to Beijing to collect an award; four years later he would sit at the top of the Hurun Rich List.

Charles Zhang graduated from MIT and came back to Beijing to become the most famous internet entrepreneur of his generation. He renamed his company "Sohu" — a name that sounded like, and was meant to work like, that internet legend "Yahoo."

Wang Zhidong was named president and CEO of Sina. His biggest achievement until then had been developing a Chinese-language Windows platform and founding Stone Rich Sight, a company built on software. Now he was turning to the internet business, less than a year before Sina listed on Nasdaq.

Tencent launched an instant-messaging program called OICQ, later renamed QQ. It was not the only product on the market with a name like that — all of them copied ICQ, made by an Israeli company. OICQ was sluggish at first. Two years later, in an office in Shenzhen's Huaqiangbei, Pony Ma was losing sleep over fundraising.

Jack Ma came back to Hangzhou from Beijing. Alibaba's business was still unclear, but he made the cover of Forbes the following year. What people remembered about him most was that his English was good.

Trip.com Group was founded in Shanghai; among its co-founders was Neil Shen, a master of capital markets.

Dangdang copied Amazon and started selling books online. The next year, Kingsoft, with Lei Jun as general manager, turned Joyo.com's main business into an online bookstore as well.

That same November, Shanda Networking was founded. Two years later, The Legend of Mir 2, the Korean online game Shanda held the exclusive license for, would redefine what popularity and addiction meant.

Behind these companies stands a crowd of peers and rivals who vanished and were forgotten. Some had their moment of glory and then went quiet; others rewrote the rules of the game and were overturned by the next wave of innovators……

We interviewed a few of the earliest chroniclers of China's internet, hoping to rebuild that era through them.

Some of them compare it to Woodstock. Some remember a freedom, an absence of limits, that had never existed before. Some praise the entirely new way of building wealth.

"Courage" and "persistence" were the words that came up most often — more often, even, than "ideals." And, of course, "luck."

But others say that what looks unimaginable now felt perfectly ordinary at the time; the people who later became entrepreneurial heroes and models of wealth were just the ordinary people around you, and back then you could not have picked them out at a glance.

We will publish these chroniclers' oral accounts and their own stories one by one. This is the fourth.

By 1999, Southern Weekly was already enormously influential. At its peak it printed 1.09 million copies, close to 100,000 of them in Beijing alone. Real numbers, no padding. The paper had also grown thicker, from four broadsheet pages at launch to 20.

Next to the mainstream press, the internet's voice in those years was still small. "There wasn't much to look at, either. There were very few Chinese-language webpages — you could basically read every post in a day." Yet a year earlier Southern Weekly had gone so far as to run a commentary predicting that every newspaper would die, because newspapers run on a schedule and the internet can be instant. This did not please editor-in-chief Jiang Yiping.

Broadly speaking, nobody believed it would actually happen. You only have to look at Southern Weekly in 1999. Aside from the cover story on a fire in Xinjiang, what struck people at the very start of the year was the New Year's message, There Is Always a Force That Moves Us to Tears (《总有一种力量让我们泪流满面》). Jiang Yiping's editor's note, Let the Powerless Have Power, Let the Pessimists Move On (《让无力者有力，让悲观者前行》), ran on page nine of the same issue. None of it could have appeared on the internet.

Li Rong, 30, was from Chaozhou, and at this point an editor at Southern Weekly. After graduating from the Chinese department at Sun Yat-sen University he joined the Guangdong Writers Association, and moved to the newspaper four years before. He started on the literary supplement.

Like most of the people who produced and ran the paper's content, Li Rong had no technical background. He did not know exactly what technological change lay behind the shift in how information spread and how people got hold of it. At first he had not thought systematically about how a mainstream newspaper should cover this new field. In Beijing, both software and hardware companies were moving into internet business, but for a supplement editor all of that was too far inside the trade. He was simply following his own curiosity.

Li Rong liked going online, and the paper had a connection. "There was only one account — once someone was on, nobody else could get on, but not many people were interested anyway. At 14k, even a small image took forever to download. Mostly I read text and checked email." He also looked after Southern Weekly's email account, whose suffix was so long he can no longer remember it.

Li Rong's private interest in the internet later became the source of this general-interest paper's sharp instincts and its nerve.

On October 31, 1997, in a World Cup qualifier, the Chinese national team lost 2–3 to Qatar at home in Jinzhou, Dalian. On November 2, a piece of more than 2,000 characters called Dalian Jinzhou Does Not Believe in Tears (《大连金州不相信眼泪》) went up on the sports salon of Stone Rich Sight; within 48 hours it had passed 10,000 clicks. The number looks trivial now, but CNNIC (the China Internet Network Information Center) counted only 620,000 internet users in the whole country in 1997. Dalian Jinzhou Does Not Believe in Tears became known as "the first high-traffic article in the Chinese-language internet."

Stone Rich Sight was the predecessor of Sina.com, in its early years an important Zhongguancun software company that had released a Chinese-language Windows platform. Forums were the first internet business it launched, and before the World Cup they had been lukewarm. Chen Tong was then the moderator of the forum's sports board; not long after, he joined Stone Rich Sight, and in 1998 he became editor-in-chief of Sina.com, later leading Sina to upend how news was produced and distributed in its coverage of the Kosovo War, the embassy bombing and earthquakes.

As sports editor, Li Rong was watching the responses on the forum in November 1997. Beyond the traffic, he loved the piece's touch of magical realism. "You couldn't write something like that once the moment had passed," he said, adding that Lao Rong wrote better than plenty of professional writers. "Lao Rong" was the byline on Dalian Jinzhou Does Not Believe in Tears; his real name was Wang Juntao. The e-commerce site he later founded, 8848, once rode impossibly high, and may still be less famous than this one piece of writing.

Li Rong decided to run it on Southern Weekly's sports page. The IT page editor had had the same idea and was a step too slow. It was a bold decision: newspapers hardly ever reprinted anything from an internet forum. "The internet couldn't get into mainstream media back then, nobody paid attention to it. BBS forums existed and they were lively, but they were a game for a small number of people. Mainstream society didn't understand them and didn't bother with them." Jiang Yiping, Southern Weekly's editor-in-chief at the time, did not go online herself, but she "supported every young person who wanted to try something," and she agreed to run Dalian Jinzhou Does Not Believe in Tears.

Still, all of it was so new and so remote that in the editor's note attached to the piece, Southern Weekly got the company's name wrong, turning Sitong Lifang — Stone Rich Sight — into "Sifang Litong."

"The underground internet's first big impact on mainstream society probably started with that piece," Li Rong said in January, in a café in Guangzhou. People began to see that a good piece of writing could be published online first. "Back then it felt like that corny old line, 'the real masters live among the common people.' Actually, the real masters always do."

In 1998 Li Rong took over the paper's IT page as well. Southern Weekly became one of the first chroniclers of the internet, ahead of the trade press and ahead of the business media that would multiply a few years later.

"The IT media back then — Computer World, China Computer News, Computer Newspaper — all did hardware, old IT, nothing to do with the internet," Li Rong said. Southern Weekly covered the internet "from the angle of social trends, of culture, of how it was changing people's lives." Several early IT columnists made the same point: this was "reporting on it before there was any money in sight."

1

In 1998 Southern Weekly set out to run a joint poll with "Sina Sports." The questions were simple, mostly predictions of the next day's match results; the system turned the votes for each scoreline into a pie chart. Polling through a newspaper was hard, and the internet made it easy — Sina put the poll on its homepage, counted the results a week later, and Southern Weekly printed them. But the two sides' influence was so lopsided that the arrangement looked more like free advertising for Sina.

In those early years plenty of people wanted to borrow the mainstream media's reach, and it happened at the same time as the internet's move into ordinary life. "Sina, Sohu, NetEase — we watched them grow up, and we helped them, and we did it looking down at them," Li Rong said. Much the same way AOL and Yahoo took out full-page ads in Forbes in their early years, hoping an authoritative magazine would make their names. Who could have guessed they would soon be competing for the same advertising?

Liu Ren was then assistant editor-in-chief and head of the reporting department at Computer World. He had already published Heroes of Knowledge (《知识英雄》), The Zhongguancun Problem (《中关村问题》) and The Enterprise Method (《企业方法》), known together as the "Zhongguancun Trilogy," and he was one of the most influential IT journalists of his time. Once Southern Weekly began running internet coverage, Liu Ren worked his way to Li Rong through friends of friends. He wanted the two of them to collaborate.

"[Liu Ren] felt that staying inside the trade wasn't enough, the influence was too small, and he wanted to speak to the mainstream. From my side, I needed something more technical to back it up. The internet had already become an industry; you had to understand the hardware, the architecture of websites, what the underlying layers of the internet actually were." The column they produced together was later collected into a book, China.com (《中国.com》): forty articles, more than 400,000 characters.

The pieces ran simultaneously in Computer World and Southern Weekly. Liu Jiuru, editor-in-chief of Computer World, recalled in a preface that Liu Ren wanted to borrow from Along the River During the Qingming Festival and open a column called "China.com" that would sketch the human panorama of contemporary China against the backdrop of the internet.

Liu Ren and Li Rong interviewed the traditional IT businessmen — Liu Chuanzhi, Stan Shih, Yang Yuanqing, Edward Tian and Lei Jun (still general manager of Kingsoft then, and yet to found Xiaomi) — and nearly every one of the first generation of internet entrepreneurs. Wang Shuo and Cui Jian turned up in the column too, not necessarily because they were pioneers in using the internet, but because "Liu Ren personally found it interesting. His reporting had always been confined to the IT industry, and he thought that by teaming up with Southern Weekly he could do things outside the trade." In his interview, Cui Jian said that thanks to technology he could imagine a future where a live show would not need a band.

"That was Liu Ren's golden period, the time he took the work most seriously. For a 10,000-character interview he'd transcribe forty or fifty thousand and keep revising. We worked well together — he was a very good recorder. I was a good editor." In the end the full pieces, 10,000 characters and up, ran in Computer World, while the Southern Weekly versions were cut to about 1,800, closer to what a general reader wanted.

Some people thought that was wasteful. "A colleague on the IT beat said, these are the two most important papers there are, and what you two are doing is unbelievably redundant… I still think it was a worthwhile experiment, though. These two kinds of media had never merged before, they had very little in common. This way IT coverage got more humanistic, and the humanities coverage got more technical substance in it."

Southern Weekly ran a number of other important columns in that period. Whatever views they held, whatever field they came from, these new columnists widened the ways people could look at the internet. Guo Liang's column for Southern Weekly started out explaining how to install Windows 95. In 1998 he wrote a piece on getting online through a proxy, which drew a considerable response. In 1999 Fang Xingdong wrote The Venus Project: Blessing or Curse? (《维纳斯计划福兮祸兮》) for Southern Weekly, attacking Microsoft's monopolistic tactics — "sniping at Microsoft from a nationalist angle." A rebuttal by the young economist Xue Zhaofeng ran in Southern Weekly too, arguing that "a monopoly that comes out of natural competition is in fact beneficial and should be encouraged, as opposed to a monopoly created by institutional arrangement."

As IT coverage and columns grew popular, these observers and chroniclers had an influence that nobody in the role has had since. Fang Xingdong remembers that outside World Cup season Sina's IT forum was for a while busier than its sports forum: "IT was the center of things, the active users basically all lived there." In 2000 Wang Changtian added China Internet Report to his existing China Entertainment Report, airing daily — "even now there's no program that can go head to head with an entertainment show." Zhang Shuxin, founder of the consumer ISP Yinghaiwei, paid for the publication of a book series called "Internet Culture."

Li Rong's collaborator Liu Ren founded the IT writing community DoNews — the Chinese name means "bullfighter" — in April 2000, hoping to bring these columnists fame and money. The site was bought by Oak Pacific Interactive on December 29, 2005.

2

In 1999 Shao Yibo founded EachNet in imitation of America's eBay, a platform for selling secondhand goods that set out to "lower transaction costs through the internet." Interviewing Shao Yibo in Shanghai left a strong impression on Li Rong, who called him "an elite in the worldly sense": "Top student since childhood, comfortable family, intellectual household, refined and well-mannered, excellent grades, tested into Harvard, got a good education and absorbed it, then came back to start a company. A template for winning at life."

EachNet was very American too: the founders all had strong pedigrees, Harvard Business School graduates, classmates as co-founders, seed money from the United States, a modern management style, stock options for employees. "The most typical Silicon Valley startup there is."

But not every entrepreneur was like that. Or rather, most were not. In 1999, NetEase came first for site traffic in CNNIC's rankings for the year. "I saw that a Guangzhou company had come out on top, so I went to find them. William Ding was still working out of an office on Huanshi Road. There were only three people. I thought it was pretty funny, that a company with three people could rank first."

In 1998 Li Rong met Charles Zhang in Beijing. Sohu's office was on Chang'an Avenue, behind the Chang'an Grand Theater.

"Not many people, two rooms, one for content and one for business, very ordinary. Because we were all the same age, and the gap between rich and poor wasn't what it is now — even though he'd taken tens of thousands of dollars from Negroponte, nobody thought he was anything special. He said at the time, everyone thinks we're doing search, but actually we're just doing indexing."

On February 25, 1999, when Li Rong saw Charles Zhang again at Sohu's anniversary party, Zhang looked nervous. Nicholas Negroponte had been invited. He came to China often in those years, sometimes at the State Council Information Office's invitation for an academic symposium, sometimes for an award ceremony at the China World Hotel. Even though The Wall Street Journal had put Negroponte on its 1998 list of things that most deserved to be thrown in the trash, his early column in Wired, his book Being Digital — collected into a volume and pushed hard by its publisher — and his role as Charles Zhang's venture investor made him about as famous in China "as KK is now": Kevin Kelly, the author of Out of Control.

That day, "Charles Zhang was very nervous. He couldn't stand still on stage, kept moving. Negroponte's a professor, so he's used to speaking in public, and he opened by saying, I'm honored to be in China, this is a student I'm very proud of. Just an opening line. Charles Zhang kept his head down, listening. Negroponte looked at him, expecting him to translate, and Zhang kept his head down, held the microphone to his mouth, thought for a second and said, please go on. Ha ha ha. I think that was pretty typical — of the internet back then, or of Chinese society back then. Everyone was still green, still very young, not seasoned the way people are now, where everything is done just so and everyone dresses just right."

The image of Charles Zhang that people would go on to remember was rebellious and flamboyant, and that had a lot to do with a set of photographs that ran in Southern Weekly. When Sohu opened its South China office in Guangzhou, Li Rong suggested shooting a few pictures of Zhang for "Portraits," Southern Weekly's photo page. "Portraits" usually ran pictures of ordinary people, or photo essays on a theme. Internet-startup celebrities like Charles Zhang had never appeared there.

Choosing Charles Zhang was chance. "A lot of the time it just came down to who you happened to have a chance to meet, and who you got on with." "Charles Zhang wasn't all that impressive then. If his company had died like the others did, those photos would have been worth nothing."

The photographer Wang Jingchun worked at Southern Metropolis Daily. He arranged a particular setting: the Golden Water Bridge in front of Tiananmen. He also had Charles Zhang put on a helmet and lace up roller skates — roughly the image of a young man back from MIT who wanted to break the rules and change the country. A memory of Fang Xingdong's fills in what that image meant:

"The first time I met Charles Zhang was around '96 or '95. We met at a café, and a lot of what he talked about was about China — how education had to be reformed, he thought China's education had serious problems. The internet was only one of the things he cared about… [what he was thinking about was] how to make the country better… pushing change in China on many fronts."

The set of photographs, which today would be almost impossible to make, attracted little attention in the period right after it ran.

"It was only after the American press used these photos to cover Charles Zhang that they became influential. If you look back at those images now, with the buildings behind him, they're a lot like the way Time covered Han Han in the US — they love scenes with that kind of political connotation, wearing a helmet, riding a skateboard, at the Golden Water Bridge. I think Wang Jingchun must have looked at a lot of those photos and was naturally influenced by them," Li Rong said.

3

In 1999, Southern Weekly's IT page became one of the pages run by the economics department. The paper set up a "New Economy" section, and Li Rong was one of its core members; the other early members included Li Yong, later editor-in-chief of Global Entrepreneur magazine, and Yang Fu.

The term "new economy" first caught on in the United States, meaning a business and economic model built on IT and internet technology. A wave of new-economy magazines came with it, Wired and Upside among them, magazines nearly as thick as your fist that never had to worry about finding advertisers.

By the time "new economy" reached China, the meaning had grown more complicated. "[The new economy's] biggest driver was the WTO, and the second was the internet." "When Cisco's share price peaked in 2000, people really did feel that the most important companies of the future might all be internet companies. Because joining the WTO meant moving toward the US, people felt every startup at home needed an American template — this one's the American eBay, this one's the American Yahoo, this one's the American Google… and whatever happened in America would happen in China too."

Southern Weekly's "New Economy Department" began preparing a new newspaper.

"For years people kept talking about [joining the WTO]. We felt that once China was in, the economy would become the single most important subject, because the economy touches every business, and everybody would become an investor. We needed a newspaper. China's market is enormous, and back then all the market really had was something like China Business Journal, which covered how particular companies operated, leaning toward management and marketing. There was no big macroeconomic paper. It looked like a gap," Li Rong said.

They planned to call the new paper New Economy Times. As luck would have it, a paper in Sichuan already had the name, so it ended up being called 21st Century Business Herald. "What we wanted to make was the same thing anyway. The 21st century — isn't that new?"

21st Century Business Herald launched on January 1, 2001; its founding team included Shen Hao, Liu Zhouwei, Chen Dongyang and Li Rong. Its layout borrowed from The Wall Street Journal, its slogan was "Growing together with a China that has joined the WTO," and its inaugural editorial was titled "Our dream is the nation's dream." It sold for 2 yuan a copy, the most expensive newsstand paper of its day.

On December 11, 2001, China formally joined the WTO.

Two years after the paper launched, William Ding topped the Hurun Rich List on the strength of NetEase's share price, which had recovered after its Nasdaq listing. Li Rong proposed writing an editorial about it.

"He was born in '71, and you could say he had no background at all. I was excited about it at the time, and I told Shen Hao, I think this belongs in the editorial. It really was a landmark event. It meant that from then on, wealth could be in the hands of young, educated people; anyone around us had that possibility now. Before, that possibility didn't exist.

"Before, it took generations of accumulation to get to that position — someone like Rong Yiren, or the Four Great Families. But now this person is a friend of ours, someone you might even look down on sometimes, clumsy and awkward.

"I remember there's a film called Four Weddings and a Funeral, with Hugh Grant. It's also about a group of friends, all sorts of people, who hang around together all the time. One of them is very rich, a guy named Tom, kind of goofy. I remember it clearly, there's a bit where the main character asks him, are you the richest man in Britain? And he says, probably not, I think the Queen's probably richer than me, I'm probably fourth. These people hung around together all the time, no airs, no posturing — not like rich people now, whom you can't even get near."

The editorial was never written.

"I think one day it'll get to the point where as long as your wealth is legal and out in the open, people will respect you for it."

Li Rong

First went online in 1995. An editor at Southern Weekly from 1995 to 2000, where he led the paper's coverage of the internet from a social and cultural angle. Wrote a column with Liu Ren, another important IT journalist, later collected into the book China.com. Co-founded 21st Century Business Herald in 2001. Now works at Chimelong Group.

Cover image from AbsolutVision on Unsplash, and Chilam Siu on Unsplash