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Home > Resources > News > Politics > China
Murdoch¡¯s Dealings in China: It¡¯s Business, and It¡¯s Personal
POSTED: 9:51 a.m. EDT, June 26,2007

Many big companies have sought to break into the Chinese market over the past two decades, but few of them have been as ardent and unrelenting as Rupert Murdoch¡¯s News Corporation.

Mr. Murdoch has flattered Communist Party leaders and done business with their children. His Fox News network helped China¡¯s leading state broadcaster develop a news Web site. He joined hands with the Communist Youth League, a power base in the ruling party, in a risky television venture, his China managers and advisers say.

Mr. Murdoch¡¯s third wife, Wendi, is a mainland Chinese who once worked for his Hong Kong-based satellite broadcaster, Star TV. Her role in managing investments and honing elite connections in China has underscored uncertainties within the Murdoch family about how the family-controlled News Corporation will be run after Mr. Murdoch, 76, retires or dies.

Regulatory barriers and management missteps have thwarted Mr. Murdoch¡¯s hopes of big profits in China. He has said his local business hit a ¡°brick wall¡± after a bid to corral prime-time broadcasting rights fell apart in 2005, costing him tens of millions of dollars.

But as he seeks to buy Dow Jones, the parent company of The Wall Street Journal, his track record in China has attracted attention less because of profits and losses than for what it shows about his management style.

Mr. Murdoch cooperates closely with China¡¯s censors and state broadcasters, several people who worked for him in China say. He cultivates political ties that he hopes will insulate his business ventures from regulatory interference, these people say.

In speeches and interviews, Mr. Murdoch often supports the policies of Chinese leaders and attacks their critics. A group of China-based reporters for The Journal accused him in a letter to Dow Jones shareholders of ¡°sacrificing journalistic integrity to satisfy personal and political aims,¡± a charge the News Corporation denies.

His courtship has made him the Chinese leadership¡¯s favorite foreign media baron. He has dined with former President Jiang Zemin in the Zhongnanhai leadership compound in Beijing and repeatedly met other members of the ruling Politburo in Beijing, New York and London. Television channels affiliated with Mr. Murdoch beam more programming into China than any other foreign media group.

¡°The reality is that the Chinese government is not going to let anything radical happen in media,¡± says Gary Davey, an Australian who once ran Star TV for Mr. Murdoch. ¡°But we got a lot farther than anyone else did.¡±

News Corporation officials in Beijing and Hong Kong declined to comment for this article. After The New York Times began a two-part series on Monday about Mr. Murdoch¡¯s company, the News Corporation issued a statement:

¡°News Corp. has consistently cooperated with The New York Times in its coverage of the company. However, the agenda for this unprecedented series is so blatantly designed to further the Times¡¯s commercial self interests ¡ª by undermining a direct competitor poised to become an even more formidable competitor ¡ª that it would be reckless of us to participate in their malicious assault. Ironically, The Times, by using its news pages to advance its own corporate business agenda, is doing the precise thing they accuse us of doing without any evidence.¡±

China has never been a make-or-break proposition for the News Corporation, since its operations here represent a small part of the company, which is valued at $68 billion. But Mr. Murdoch pushed for nearly 15 years to create a satellite television network that would cover every major market in the world, including China.

He coveted the $50 billion in ad spending that flows mainly to China¡¯s state-owned news media whose products, even after years of improvements, still reflect propaganda directives as well as consumer demand.

The News Corporation¡¯s competitors in television and film, the Walt Disney Company, Viacom and Time Warner, also had to accommodate Chinese demands as the price of admission to the local market.

But Mr. Murdoch gave more, his associates said.

¡°The Chinese discovered that Rupert was a real emperor who controlled everything himself,¡± said H. S. Liu, who oversaw government relations for the News Corporation in China. ¡°His rivals had big, cautious bureaucracies that could not always deliver.¡±

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