News Magnate Baits Beijing


By: Wall Street Journal

By GEOFFREY A. FOWLER and JONATHAN CHENG
October 23, 2007

See Corrections & Amplifications item below.

HONG KONG — Late last month, Hong Kong media magnate Jimmy Lai’s reporters were among the first in the world to sneak into tightly controlled Myanmar to cover brutal crackdowns on antigovernment demonstrators. His Apple Daily newspaper ran their stories and photos of bloodied monks on the front page for three days, and pointed the finger at China to stop the violence.

The next week, Apple’s cover moved onto other priorities: A British teenager’s belly-button ring had gotten lodged inside her body, and Apple had front-page photos, diagrams and interviews with local starlets about their own belly-button rings.
THE HEADLINES

[Newspapers icon]
See translations of two recent Apple Daily front pages.

Mr. Lai, long a combative agitator for press and political freedoms in China, has remade Hong Kong’s media landscape by pairing two unlikely subjects — democracy and sex. His Next Media Inc. publications frequently provoke Beijing and have stoked antigovernment rallies in Hong Kong, in political reports often interspersed with racy photos or consumer reviews of local strip clubs and saunas.

Mr. Lai’s public battles illuminate the uncomfortable relationship between Hong Kong and the Chinese government since the city was handed over from British control 10 years ago. Mr. Lai himself has become an awkward liability to some democracy advocates and journalists, who worry that his excesses will distract from their cause or spark a government backlash in Hong Kong’s relative oasis of free speech.

Last year, a Lai magazine cover featured a 14-year-old Chinese pop star in a soaked-through nightgown and sparked a child-pornography charge by Hong Kong’s prosecutor. A court sided with Mr. Lai, but a government appeal is pending. A cover photo last year of another pop star changing clothes forced Mr. Lai to issue an apology, after a private conversation with Hong Kong’s Roman Catholic cardinal and a public march on Mr. Lai’s office led by martial-arts star Jackie Chan. Mr. Lai is “both a devil and a saint,” says Ying Chan, founder of the Journalism and Media Studies program at Hong Kong University. “Does he stand for something good in Hong Kong? Yes. Does he stand for something bad? Yes.”

Paparazzi-Style Journalism

Mr. Lai’s success has triggered his competitors, including the top-selling Oriental Daily News, to adopt his publications’ risqué, celebrity-centered style — a conversion often described by local journalists as “Apple-ization.” Readers gobble up Apple Daily, Hong Kong’s No. 2 newspaper by readership, and Mr. Lai’s three top-selling magazines — even as many decry the paparazzi-style journalism he has introduced to the Chinese-speaking world.
[Jimmy Lai]

Mr. Lai, whose $600 million stake in Next Media may make him the wealthiest media owner in greater China, doesn’t see any contradiction. “Just because we promote democracy doesn’t mean we have to be puritan,” he said in an interview in his backyard greenhouse on a Hong Kong hilltop, surrounded by his collection of birds chirping in cages. Folding political coverage inside a titillating package is “the cross I have to carry,” he said. “We’re the bad boys on the block, we’re the opposition media. Who cares what you write if nobody reads it?”

A spokesman in Beijing for the Hong Kong and Macau Affairs Office placed Next Media among “a few individual media companies that don’t abide by the basic journalistic principle of truthfulness, and even intentionally create fake news.” The Beijing official said the city’s “Basic Law,” or mini-constitution, guaranteeing press freedom doesn’t need to be changed to address such companies. But he added, “We do not welcome them.” Unlike most other Hong Kong publications, Next Media’s staff aren’t allowed by Beijing to officially open bureaus and operate in the mainland.

Mr. Lai said his publications twice apologized in the 1990s for publishing two false or misleading reports — one claiming a tycoon had cancer, and another in which Apple Daily set up a photo of a man with prostitutes, suggesting a reason for his wife’s recent suicide. But Mr. Lai challenged Beijing to “show one piece of evidence” of false reports since then.

Since the handover from British to Chinese rule, Hong Kong’s press so far has avoided the clampdown on its freedom some feared. But some dissenting voices have lowered. Most of the city’s publications are owned by companies or families with ties to Beijing, or aspirations to expand their business in the booming mainland. Many journalists describe a creeping self-censorship practiced by publications in order to curry favor with Beijing and advertisers.

One recent survey by the Hong Kong Journalists Association found that 31% of the city’s reporters had “practiced self-censorship” themselves or seen it done by their colleagues — a situation the union called “worrying and alarming.” One example, according to the association: Few of the city’s 15 Chinese-language dailies prominently reported when Ma Lik, chairman of a political party with ties to Beijing, told reporters in May that the 1989 deadly government crackdown on protestors in Tiananmen Square shouldn’t be labeled a massacre.

By contrast, Apple Daily covered Mr. Ma’s comments with a giant front-page headline reading “Ma Lik: Cold-blooded.” Then on the June 4 anniversary of Tiananmen Square, page A20 of Apple Daily featured an essay by a man who was jailed because of the protest, and another urging readers to attend a yearly candlelight vigil for democracy. On the next spread that day: Apple’s daily quarter-page picture of a foreign actress or model in a bikini, a feature dubbed “Windows on the World.”
[Antigovernment poster printed in Next Weekly]
Next Weekly
Antigovernment poster printed in Next Weekly

Mr. Lai, 58 years old, was born in Guangzhou, near Hong Kong in southern China, in 1948 to wealthy parents who were stripped of their assets with the Communist Party’s takeover the next year. Too poor to go to school, 9-year-old Mr. Lai got a job carrying bags at a train station, where he encountered travelers from outside Communist China. “The baggage smelled so well, during the famine — wow,” he says. “I was sure the outside world was better than the lies we were being fed by the Communist government.”

Piece of Chocolate

His first encounter with a piece of chocolate, offered to him by a well-dressed Hong Kong man, convinced him to flee China at age 12, Mr. Lai says. He traveled to Macau, at the time a Portuguese colony, by boat and bus, he says, then smuggled himself in a fishing vessel to Hong Kong. In the British colony, he worked in garment factories, then worked in New York’s garment industry as Hong Kong factories’ representative to retailers.

In New York, he was exposed by friends to the ideas of economist Friedrich Hayek, known for his defense of free-market capitalism and critique of socialism. Today his company offices feature statues of Mr. Hayek and of economist Milton Friedman, whom he later got to know personally.

In 1981, Mr. Lai launched a Hong Kong casual-fashion chain reminiscent of Gap stores in the U.S. He named it Giordano after a New York pizzeria; he kept a napkin from the restaurant because he liked the Italian sound of the name, he said. Giordano became one of Asia’s largest retail chains by targeting younger members of a growing middle class.

The affairs of mainland China were a distant concern to him until the 1989 Tiananmen Square demonstrations, Mr. Lai says. Then, he joined Hong Kong street protests in support of the student movement. He hoisted banners in Giordano outlets calling for Chinese leader Deng Xiaoping to “step down,” and sold T-shirts echoing the same slogan.

The next year, Mr. Lai used some of his Giordano fortune to found his first magazine, Next Weekly, “to participate in this moment of China’s opening up,” he says. “By delivering information, you are delivering choice, and choice is freedom.” Next Weekly had political coverage but also emphasized consumer news and exposés on the rich and famous. Mr. Lai says he wanted to “put fragments [of] every magazine into one.” In 1991, he launched a second magazine, Easy Finder, with a focus on celebrity news. Both quickly spawned copycats.

Payback for Criticism

Meanwhile, Mr. Lai was expanding Giordano on the mainland, but in 1994 the government abruptly closed a Beijing store — a move widely interpreted as payback for his criticism of the government. He says he was relayed a message from Beijing that he should divest himself of the company. The Ministry of Commerce in Beijing did not respond to a request to comment for this story. Mr. Lai gradually sold his stake, reaping $189 million. The chain has since grown into a big mainland presence.
[Counting on Readership]

In 1995 he launched Apple Daily, charging the equivalent of about 25 cents at the newsstand when his rivals were charging about 65 cents. The paper emerged from a long price war as the second-biggest seller. Mr. Lai also expanded his reach to Taiwan, launching Taiwan Next Weekly in 2001 and Taiwan Apple Daily in 2003, which both became No. 1. The island’s staid news environment, in which people largely chose their papers by their political affiliation, was ambushed by Mr. Lai’s colorful mix, says Serena Chen, the chairwoman of the Association of Taiwanese Journalists. “Everyone thought party affiliation was most important until Apple Daily came along and said whatever the audience wants, that’s what we’ll give them,” Ms. Chen says. Next’s Taiwan publications cover politics but aren’t tied to any party.

On July 1, 2003, Apple Daily rallied Hong Kong readers to protest because of unhappiness with Beijing-appointed chief executive Tung Chee Hwa. Complaints included poor handling of the outbreak of Severe Acute Respiratory Syndrome, or SARS, and the local government’s antitreason proposal that could limit the rights of journalists and others to criticize the government. Next Weekly printed a pull-out poster of Mr. Tung with a pie in his face. The message across the top in Chinese said, “We can’t take it any more!” The poster became a popular symbol of that protest, which helped oust Mr. Tung. The antitreason measure was put on hold.

That year Apple also broke the story that Hong Kong’s financial secretary had bought a Lexus just weeks before he raised the tax on new luxury vehicles. In the scandal that ensued, the official eventually resigned.

Mr. Lai contends his political coverage has made Next Media the target of an advertising boycott by some of the city’s biggest conglomerates, many of which have close ties to Beijing. Each year, Mr. Lai estimates, ads lost to other publications cost his company about $25 million. “If you read Apple Daily, you would almost think there are no real-estate businesses in Hong Kong, or supermarkets in Hong Kong,” Mr. Lai says. Some media buyers say there are companies that choose not to advertise in Next Media publications, but they don’t see evidence of an organized boycott.

Mr. Lai’s problems escalated after the cover photo of the wet teen star was published in the summer of 2006 in Easy Finder, Hong Kong’s No. 2 magazine. A court ruled in April that the image wasn’t obscene because of testimony that the teen wasn’t nude but wearing a flesh-colored latex bra. The Hong Kong public prosecutor’s office continues to pursue the case and declined to comment. After the second photo of a singer backstage also ran in Easy Finder in August 2006, some 300 celebrities led by film star Mr. Chan protested at Next Media’s headquarters. Women’s and Christian groups called for a law restricting paparazzi, and Hong Kong Chief Executive Donald Tsang said the outcry sped up a government review of privacy and media laws. A spokesman said a move to protect privacy shouldn’t be viewed as an “attempt to ‘regulate’ media content.”

Visit With the Pope

Outside of members of Hong Kong’s democracy movement, Mr. Lai says he has few friends. One of them is Hong Kong Cardinal Joseph Zen, who baptized Mr. Lai into Catholicism in 1997 and took him to visit Pope Benedict XVI in person last year. In an interview, Mr. Zen praised Mr. Lai’s stand on democracy and called any sensationalism in Apple Daily and its rivals the “ugly face of freedom and competition.” Yet he also pushed Mr. Lai privately to apologize for the pop-star photo, he said.

Martin Lee, a fellow Catholic and founder of the Hong Kong Democratic Party, also stands by Mr. Lai, arguing readers have no problem distinguishing between Mr. Lai’s ideals and his more risqué fare. Mr. Lee says he would “prefer” if Mr. Lai didn’t do “all of that,” but adds, “There’s no such thing as perfection. We need a newspaper like that, right or wrong.”

Tabloid Content

Increasingly, the tabloid content of Next Media publications has overshadowed Mr. Lai’s attempts to provide a credible voice in debates over China’s policies toward Hong Kong, such as the timing to hold direct elections. A recent poll by Hong Kong University found 68% of respondents feel the Hong Kong news media overstretch and “abuse” press freedoms, up from about 50% in 1997.

Mr. Lai’s recent problems have made him something of an awkward liability for many of his allies. “He doesn’t speak for all of us,” says Emily Lau, a veteran legislator and democracy activist. They also may have hurt Next Media’s bottom line: Easy Finder sales and ad revenue dropped 16.5% in the year ended March 31, and company profits dropped 22% from the year earlier, to about $44 million. Mr. Lai noted that advertising and profits were battered across the sector. But he eventually shuttered Easy Finder, apologizing for the offending photos. He replaced it with the similar-looking Face Weekly in May.

“We won’t use those cheap photos, we won’t make the same mistakes again,” he said. Still, an undertone of defiance remains. A full-page house ad in Apple Daily this spring portrayed Mr. Lai cradling a copy of Easy Finder as a faceless mob hurls stones. It read, “Let he who is without sin cast the first stone.”

–Sue Feng in Beijing contributed to this article.

Write to Geoffrey A. Fowler at geoffrey.fowler@wsj.com and Jonathan Cheng at jonathan.cheng@wsj.com

Corrections & Amplifications

Next Weekly, a unit of Next Media Ltd., in 2003 published a poster showing Tung Chee Hwa, then Hong Kong’s chief executive, with a pie in his face. This article incorrectly said the poster was published by a sister publication, the Apple Daily newspaper. This article also incorrectly identified the parent company as Next Media Inc.

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